The UK’s second biggest independent card retailer, Clintons, is being rescued by a pre-pack administration so that it can remain trading through its 334 shops, over the crucial Christmas period.
The pre-agreed deal allows the company to be sold back to the Weiss Family, under the new company name of Esquire Retail. The Weiss Family have been its owner since 2012. The deal also means tens of millions of pounds of debts owed to suppliers will be wiped out.
A notice of intention to appoint KPMG as administrators was filed on Wednesday morning and as soon as that afternoon was the deal confirmed.
2,500 permanent jobs will be kept with this rising to 3,2000 over the festive period.
The past few months Clintons have been undergoing talks and exploring a sale, before negotiating a Company Voluntary Arrangement with landlords, to close up to 66 stores and cut rents. Though there was some support from landlords, it was not enough for the CVA to pass the vote.
This is the second time in the past seven years that Clintons have been forced into insolvency proceedings. The retailer is particularly at threat from online rivals – even close competitor, Card Factory, who have high street stores, have entered the online sector, to align themselves with the growing market trends.
Over the last five years, around 70 loss-making Clintons stores have been closed.
CEO of Clintons, Eddie Shepherd explain that without the support of landlords for a CVA, no other investment options were available.
We are pleased to have been able to secure the future of the Clintons business, protecting all of our talented 2,500-strong workforce and ensuring continuation of trade across all of our UK store network at what is a crucial time of the year for the business.
“Like so many of our fellow high street retailers, we have worked tirelessly to contend with the maelstrom of issues impacting the sector, from business rates pressures, to fragile consumer confidence and the lack of clarity around the taxation of online retail businesses. We are confident that this deal will kickstart a new chapter for our business.”
Clintons will add to the number of retailers who are struggling and have faced struggles financially in 2019 alone. Data from PwC found that 16 shops closed each day on Britain’s high streets, in the first half of this year.