American Greetings sends Clinton Cards into administration
4.27pm statement gives hope for future of 8,000 UK jobs
Clinton Cards has invited the US firm, which bought its £35million debt, to place its business into administration.
A press release at 4.27pm yesterday (Wednesday, May 9) from American
Greetings confirmed the US company had acquired all Clinton Cards’
outstanding senior secured debt through a UK subsidiary.
The statement said Clinton Cards: “is one of American Greetings’ largest
customers” and, in addition to the £35m, the US firm has approximately
£15.5m of unsecured exposure to the British company, a majority of which
is now in default.
However there is some hope for the UK’s biggest card retailer, which has
more than 8,000 staff across 628 Clinton stores and 139 Birthdays
shops. American Greetings’ Chief Executive Officer Zev Weiss added: "We
would like to see Clinton Cards continue as an important retailer in the
specialty channel of distribution in the UK greeting card market.
“We expect that our recent investment will allow us to work closely with
the administrators while they consider Clinton Card's restructuring
“As secured lender, we are better positioned to assist in identifying
and obtaining the best possible solution for Clinton Cards, where we may
ultimately participate in the ownership of the business or may continue
as a supplier to any buyer of the business.
“We believe that properly managed, and with the appropriate capital
structure, Clinton Cards could be both an important and profitable
retailer in the specialty channel of distribution over the long term."
The American Greetings statement, added: “After extensive discussions
with Clinton Cards' management, board, and financial and legal advisors,
on May 9, 2012, Clinton Cards invited American Greetings to place its
business into administration, which gives the company (under the control
of its administrators) an opportunity to restructure its business.”
Earlier yesterday Clinton Cards suspended its shares on the Stock
Exchange after American Greetings acquired the debt from its banks last
The 44-year-old company had benefited from agreements with its original
lenders, RBS and Barclays, which allowed some temporary waivers.
Clinton Cards said it was informed overnight on Tuesday that its loans
had been sold to the US owner of UK Greetings, the holding company for
their interests in Britain.
In a statement, Clinton Cards said it had not been party to negotiations
leading up to the deal but had anticipated American Greetings would
extend the waivers granted by the banks and start talks with a view to
supporting the firm.
The Clinton statement added: “However, having secured control of the
debt, American Greetings immediately informed the board that it intended
to enforce the loan against the company and the board has concluded
that because it is unable to repay the loan it has no option but to
concur with American Greetings proposal to place the company and its
subsidiaries into administration."
Founded in 1968 by Den Lewin who named his first store in Epping, Essex,
after son Clinton – now the firm’s managing director – Clinton Cards
had been due to publish the results of a strategic review into how it
intended to cope with tough trading conditions and intense competition
from internet retailers and supermarkets.
The company announced in March that it had slumped to a first half loss
and warned that its prospects for the second half were worse than
Shares in Clinton Cards, which have lost more than 80% of their value
since the start of 2010, closed at 6.75 pence on Tuesday, valuing the
group at about £14million. UK Greetings has yet to issue a statement on