Clinton Cards administrators to continue trading, explore all options

By Caroline Salls

Pittsburgh, May 10 - Joint administrators have been appointed for Clinton Cards plc after the group experienced cash flow problems as a result of extremely challenging trading conditions, according to a Zolfo Cooper news release.

Peter Saville, Simon Freakley and Anne O'Keefe of Zolfo Cooper were appointed on May 9.

Following appointment, the joint administrators said they will continue to trade the Clinton Cards group while exploring all possible options for its future, including a sale of all or parts of the business.

"Recently, Clintons has been faced with extremely challenging trading conditions, particularly in its Birthdays subsidiary, where the combined cost to the group in terms of acquisition cost and accumulated losses is estimated to have been in excess of £130 million since 2004," Saville said in the release.

"Despite evaluating ways to restructure its business, Clintons was unfortunately unable to secure adequate support or funding for its restructuring plans.

"The challenging business environment, and in particular the increased competition for greetings cards and related products, meant that the group required radical restructuring and administration was the last remaining option available.

"Our first priority is to stabilize the business and assess its financial position. It is likely that a number of stores will need to be closed in order to make the business financially viable.

"However, Clinton Cards and Birthdays are very well known brands on the high street and we believe that there is a strong underlying core business.

"We are therefore confident that it is an attractive proposition for a range of potential buyers and welcome expressions of interest from third parties."

As previously reported, secured lender American Greetings Corp. acquired all of the outstanding senior secured debt of Clinton Cards for $56 million through a subsidiary in the United Kingdom.

According to American Greetings' Wednesday release, there have been repeated discussions with Clinton Cards since September 2011 concerning issues with American Greetings' ongoing supplies to Clinton Cards.

Despite this, American Greetings said Clinton Cards defaulted on numerous payment obligations under the supply arrangements and American Greetings recently stopped shipping product to Clinton Cards.

American Greetings said it believes that other suppliers have also recently stopped shipping products to Clinton Cards in light of its financial distress.

American Greetings is a Cleveland-based greeting card company. Clinton Cards is the U.K.'s largest specialty retailer of cards.

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