Clintons has been sold out of administration in a deal that safeguards 2,500 jobs and will enable all 334 stores to continue trading.
KPMG was appointed as administrator of the struggling greetings card retailer yesterday. The company was then immediately sold to Esquire Retail Limited, which is a new firm set up by Clintons’ current US owners, the Weiss family.
The pre-agreed deal came after Clintons failed to win support from landlords for a company voluntary arrangement (CVA) under which it wanted to reduce rents and close up to 66 stores.
Eddie Shepherd, Chief Executive of Clintons, stated that with no other investment options available, it was forced to place the business into administration. Its owners had been trying to find a buyer, but it is thought no acceptable offers were received.
In what is known as a pre-pack process, the firm has now removed many of its debt obligations and secured breathing room to start fresh negotiations with landlords. The stores will now operate “under licence” from the administrators, giving Clintons 12 months to either agree cheaper leases or close stores.
However, analysts highlighted that there is no guarantee that this will secure its future with the business needing to modernise and revitalise its brand to survive longer term.
Shepherd stated that the business had faced a maelstrom of issues impacting the sector, from business rates pressures, to fragile consumer confidence and competition from online rivals.
He welcomed the rescue deal that will now allow Clintons to continue trading over the key festive trading period, adding: “We are confident that this deal will kickstart a new chapter for our business.”
NAM Implications:
- Pre-pack administration will give some breathing space…
- …but fundamental trading issues in terms of growth in turnover still have to be addressed.
- Pragmatic NAMs need to consider their options…
- …including proposing ways of driving sales…
- …but also scoping out the implications of Clintons corrective measures not working.
- i.e. work out the incremental sales required to replace lost profit on their Clintons business…
