Clinton Cards buys back 196 Birthdays stores
Jun 26 2009 by Jon Griffin, Birmingham Post
Dozens of West Midland workers are celebrating after Clinton Cards saved nearly 1,500 UK jobs – just a month after 332 stores crashed into insolvency.
About 70 jobs across the region have been rescued after the cards giant announced it had bought back 196 of the cash-stricken Birthdays chain from administrators Zolfo Cooper.
The rescued stores will continue to be operated under the Birthdays brand, which will be managed from the Clintons head office in Loughton, Essex.
Among the shops which form part of the rescue package are at locations in the Bullring, the Fort Shopping Centre, West Bromwich, Wolverhampton, Walsall, Dudley and Cannock. But about 750 jobs UK-wide will be lost at the card chain with the closure of 136 stores after administrators said they had not found a buyer.
The Birthdays greetings card company was placed into administration in late May after Clinton Cards said it was no longer able to continue funding the loss-making subsidiary. The credit crunch has had a major impact, with Clintons claiming 50 per cent of all the brand’s stores were piling up losses.
The Clinton Cards store chain, which employs about 6,200 staff in 692 shops, were unaffected by the collapse and continued to trade as normal. Clinton Cards chairman Don Lewin said: “We are very pleased to be able to report the successful purchase of a large proportion of the Birthdays stores, thereby ensuring employment for 1,450 people.”
Clinton said £3.25 million of the deal price would be deducted from the amount owed to it by Birthdays.
The 196 stores had sales of £74 million and a gross asset value of about £26 million as of last August.
It bought rival Birthdays in December 2004 but the chain has not been able to shake off its troubles and the parent company continued to provide financial support despite an upturn in performance.
The company said last month it could not sustain supporting Birthdays’ losses of about £7 million a year and said there was “limited opportunity to improve on that performance in the foreseeable future”.
The stores will continue to be operated under the Birthdays brand. Peter Saville, partner at Zolfo Cooper Europe, said: “Securing the future of the business has meant that a number of very difficult decisions had to be made.
“Without being able to secure a buyer for the remaining stores it was not possible for them to continue trading, and this has regrettably led to the loss of a number of jobs from those stores that have closed.”
Nick Coulter, of Numis Securities, said the return of a slimmed-down Birthdays to the Clintons fold was good news for the parent company.
“Having come out the other side of administration, Clintons has renegotiated deals with landlords across the Birthdays chain, leading to a substantial reduction in the rent roll,” he said.
