The brand and core assets of the Clinton Cards business have been sold to a subsidiary of the supplier which forced it into administration, it was confirmed today.
Lakeshore Lending Limited, a part of the American Greetings Corporation, has acquired the main bulk of the business, including 397 stores, which should preserve some 4,500 of the nearly 8,000 staff members employed by the card retailer before its collapse.
In May, American Greeting – a major supplier to Clinton Cards – purchased the retailer’s outstanding debt from its lenders and demanded immediate repayment, which forced Clintons to appoint Zolfo Cooper as an administration as it could not service the debt.
Zolfo Cooper subsequently announced that 350 of Clintons’ 750 stores would be sold off to help pay off its creditors and make the business more attractive to potential buyers.
Clintons had seen its sales fall dramatically over recent years with online competitors and supermarkets eating into its market share, making its large and expensive store portfolio increasingly difficult to maintain.
Its management team was on the verge of publishing a major turnaround strategy which would have completely reshaped its management structure when American Greetings called in the debt.
Peter Saville, Joint Administrator and Partner at Zolfo Cooper, said: “We have always been of the view that despite an intensely competitive retail environment and what proved to be excessively ambitious expansion plans in recent years, there was a strong underlying business contained within Clinton Cards.
“The significant number of credible expressions of interest we received for the business we have sold today, from both trade and financial buyers alike, is testament to this fact.
“We would like to thank the staff for their dedication and patience throughout what has been an understandably difficult time for all concerned and we wish both them and the new owners of the business every success for the future.”
The remaining 350 stores will remain under Zolfo Cooper’s control and the corporate advisory firm is still hopefully that a part or the whole of the discarded estate can still be sold to interested parties.
Under the deal Lakeshore Lending has acquired 20 of the retailer’s Birthday stores, with the remaining 87 outlets under this branding remaining with the administrator.