Clinton Cards agrees to shut 38 stores in deal to avoid total collapse
- Clintons already shut 156 stores after being sold back to its US owner in 2019
- Now a fifth of remaining 179 shops will also close after court approved a deal
Clinton Cards will close a fifth of stores as its tries to avoid going bust, after a court approved restructuring plans that should see it survive for at least another year.
The card shop, a staple of the High Street, has already shut 156 stores after being sold back to its US owner through a fast-track insolvency process in December 2019.
And the latest move – first announced as a plan three weeks ago, but now confirmed yesterday – means a further 38 of the remaining 179 shops will close their doors.
Thousands of jobs will be saved by the deal, which means the retailer will not have to make full payment of business rates and rent for its shops that are now set to shut.
Some 38 of the remaining 179 Clinton Cards shops will close their doors for good (file image)
The plan, first reported by the Evening Standard, means landlords and councils for the 38 unprofitable sites will get 8.6p for every pound owed by Clintons.
Financial advisors said the retailer was currently insolvent, and its plan had been presented by restructuring experts from FRP Advisory and law firm Jones Day.
Its owners Jeff and Zev Weiss, who are also its main creditor, have agreed to provide a ‘revolving loan facility’ that should keep it going for the next 12 months.
The flexible arrangement is a form of credit meaning someone can withdraw money, use it to fund their company, repay it and then withdraw it again when required.
Clinton Cards was founded in 1968 when Don Lewin (pictured) opened a card shop in Epping, Essex, after borrowing £500 from a friend, and named it after his son Clinton
The closure of the loss-making stores and the reduction in rent and business rates now means the owners believe they could take it back to profitability again.
But because the loan facility lasts only a year, the business – based in Loughton, Essex – could be at risk of insolvency again if it is not profitable by that point.
Clintons has struggled to stay afloat even as it slashed costs and considered a tie-up with Paperchase last December, which was eventually bought by Tesco in January.
Clintons was founded more than half a century ago in 1968 when door-to-door salesman Don Lewin opened a shop in Epping after borrowing £500 from a friend.
Clintons has struggled to stay afloat even as it cut costs and considered a Paperchase tie-up
He named the store after his son Clinton – and the retailer grew to 800 shops before floating on the London Stock Exchange in 2004, when it was valued at £150million.
But the business then slumped and sank into administration in 2012 when it had about 784 stores. It was bought by US giant American Greetings and 350 were shut.
The firm has permanently closed branches in the likes of Dorchester, Bolton and Ayr in the past 18 months. The list of the next 38 closures has not yet been confirmed.
MailOnline has contacted Clintons for comment about the restructuring today.
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