Clinton Cards is on the brink of administration after its biggest supplier said it would pull the plug on its credit, potentially putting up to 8,000 jobs at risk.
The UK’s biggest card retailer said two of its lenders, Barclays and RBS, sold £35 million of loans to Ohio-based supplier American Greetings, which is now pressing for repayments that the card company cannot meet.
Clinton has requested for trading in its shares to be suspended with immediate effect.
In March, the company – which operates 628 Clintons and 139 Birthdays stores across the UK – reported pre-tax losses of £3.7 million for the six months to the end of January, compared with a £11.7 million profit the previous year.
Clinton Cards said today in a statement: “Whilst not party to the negotiations between the banks and American Greetings, based on its discussions with American Greetings, the board believed that, if the loan facilities were sold to American Greetings, American Greetings would enter into discussions with the company with regard to its ongoing support for the business and expected it to extend the waiver of the technical breaches of the loan agreement.
“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.”
The card chain, established in 1968, has struggled in recent times with the rise of e-cards and customisable greetings products from online retailers such as Moonpig and Funky Pigeon.
The company was due to publish an interim trading update tomorrow, but said today that trading for the 14 weeks since January 29 has seen like-for-like sales fall 3.5 per cent.
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