Dozens of shop workers across Tayside and Fife face an uncertain future after card and gift chain Clinton Cards went into administration.
The familiar high street name which also owns the Birthdays string of stores has lost £130m since 2004 and had failed to find a buyer for its struggling business as a whole or in part.
It is likely that a number of stores will be forced to close, despite administrator Zolfo Cooper saying it will continue to trade the business as a going concern in search of a ”best-possible” outcome.
Clinton which has stores in Dundee, Perth, St Andrews, Arbroath, Glenrothes, Leven and Montrose, employing an estimated 40 people was tipped over the edge when loans worth £35m were called in by an American supplier who had bought the debts from banks on Tuesday.
The retailer, which had more than 620 stores, has been hit hard by competition from supermarkets and online card retailers like Moonpig and Funky Pigeon, which specialise in personalised cards.
A further 139 Birthdays shops are also affected.
Zolfo Cooper were called in on Wednesday. They said the firm had experienced cash-flow difficulties despite combined revenues of over £360m.
Zolfo Cooper joint administrator and partner Peter Saville said: ”Recently, Clinton’s has been faced with extremely challenging trading conditions, particularly in its Birthdays subsidiary, where the combined cost to the group in terms of acquisition cost and accumulated losses is estimated to have been in excess of £130m since 2004.
”Despite evaluating ways to restructure its business, Clinton’s was unfortunately unable to secure adequate support or funding for its restructuring plans,” he said.
”The challenging business environment, and in particular the increased competition for greetings cards and related products, meant that the group required radical restructuring and administration was the last remaining option available.”
He added: ”Clinton Cards and Birthdays are very well-known brands on the high street and we believe that there is a strong underlying core business. We are therefore confident that it is an attractive proposition for a range of potential buyers.”
Clinton’s fall into administration is another blow to the high street after recent high-profile casualties, including video games retailer Game Group, fashion chain Peacocks and outdoor specialist Blacks Leisure.
The firm has suffered dire trading in recent months, reporting a pre-tax loss of £3.7m in the 26 weeks to January 29. This compared with a profit of £11.7m in the previous year.
Photo by Dominic Lipinski/PA Wire