In a rather un-British and typically American business move, Clinton Cards has been forced into administration by its biggest supplier, who is also it’s biggest creditor. Last week, American Greetings took over about £35m worth of debt owed by Clinton Cards to Barclays and RBS, and promptly called in the loans.
American Greetings is a huge company, second only to Hallmark in the greeting card industry. According to Nick Hood of the business analyst group Company Watch, the strategy of buying loans owed by creditors to another lender means the buyer, in this case American Greetings, is likely to recoup a lot more of its money, since suppliers, unlike banks, are unsecured creditors.
Clinton Cards has been struggling with its finances for a long time, partly due to the loss of customers to supermarkets and the internet. More and more retailers are carrying greeting card selections along with groceries and household items, and they’re generally cheaper than Clinton Cards’ offerings. There are also plenty of choices in the e-card side of the business, plus create-your-own sites like Moonpig.
The company’s founder, Don Lewin, opened his first shop in Epping in 1968 and named it for his son, Clinton. His little family-owned business flourished, went on the stock exchange, took over a number of rivals and expanded to more than 750 stores and outlets all over the UK. The rent for all that store space has been a severe drain on financial resources.
Zolfo Cooper, the administrators, say that in order to ‘stabilise’ the company’s finances, some of the stores will have to close; right now at least 8,000 Clinton Cards employees are wondering whether and for how long they will still have a job.