Gifting & card retailer Clintons has today announced a major overhaul of its executive and non-executive board at the same time as revealing challenging trading figures for its half-year period.
As part of a strategic review being undertaken by new CEO Darcy Wilson-Rymer, current Chairman and founder of the retailer Don Lewin and a number of other directors are to leave the business in the coming months in a major shake-up of its management structure.
Clintons reported a 1.1 per cent drop in like-for-like sales during the 26 weeks ending January 29th 2012 and a first half adjusted operating profit of just £743,000, plummeting from £14.4 million for the same period last year.
The closure of 17 stores and the failure to shift older stock proved costly for the business, which owns the Clintons & Birthdays store chains, and resulted in a loss before tax of £3.67 million, resulting in a basic loss per share of 1.70p, compared to earnings per share of 4.08p in H1 last year.
Wilson-Rymer commented: “This has been a challenging period in a difficult retail environment, dominated by weak consumer confidence. Margins have also been weaker as a result of the clearance of historic overbuys, obsolete stock and the sale of lower margin gifts.
“The strategic review – which examines the customer experience, the store portfolio, business efficiency, and the digital offering – is on target for completion at the end of April.
“This is the main platform for change and I am confident that the conclusions from the review will put the business in the best possible position for a turnaround.”
A 15 per cent reduction in net headcount at the group’s Store Support Centre has already been initiated, but it is in its management structure where the most significant changes are being made.
Along with the departure of Lewin, who is leaving the business on July 31st, non-executive directors John Coleman & Robert Gunlack and Group Buying Director John Robinson will all step down from their positions on March 31st.
Stuart Holden, Clinton’s current Property Director, will also step down from the board at the end of March but will remain within the company’s executive team focusing on retail estates.
Two new non-executive appointments were also announced today, with chartered accountant Hazel Cameron bringing her corporate finance & private equity experience to the business and former Sainsbury’s, Game and Marks & Spencer manager Dave Hughes also joining the company.
Neil Saunders, Managing Director of retail analyst firm Conlumino, called today’s results “disappointing” and said that while the business should be commended for embarking on a strategic review, the challenges of a shrinking market, more competitors and a lack of innovation desperately need to be addressed.
“Clintons needs to give consumers reasons to visit, part of which will involve making shops more inspirational and putting in place a coherent digital strategy,” Saunders said.
“In our view it is also inevitable that Clintons needs to reduce store numbers further and faster; we also believe the struggling Birthdays chain should be offloaded to allow a focus on the core proposition.
“Clintons is a business under pressure. It has a lot of things stacked against it, including a forthcoming rise in postal prices which will generally be unhelpful to the market. However, it is a business that seems to understand the pressures and is proactively tackling them.”