The UK's biggest cards manufacturer has announced that it expects its largest supplier to place it into administration, and its shares have been suspended.
It has sold its debt to American supplier American Greetings, a step that the manufacturer hoped would allow them to enter recovery. The company had been benefiting from temporary waivers on loan repayments, which they believed would continue. However, after purchase, American Greetings informed the board it intended to enforce the debt, which Clintons is not able to pay back.
American Greetings could be preparing to cherry pick the best assets, and avoid any liabilities, by buying the company out of administration.
In March, Clintons reported a loss of £3.7m for the six months to the end of January and cut their profit outlook. Today it reported that trading for the last 14 weeks continued to be bad, with like-for-like sales down by 3.5 per cent. The company was extremely profitable until rival card manufacturers and online companies like Moon Pig hit profits. In 2009 it made a pre-tax profit of £24.1m on sales of £345m.
The company runs 628 Clintons and 139 Birthday shops, employing over 8000 people. The administrators will continue to trade while a buyer is found, although some shops will have to close.
Clintons was set up in 1968 by current Chairman Don Lewin, and as it grew bought out the Hallmark Cards and Birthdays brand. Lewin was due to step down in July.
Other recent high street casualties include Peacocks and the Game Group in February and March.