Earlier in May the retailer’s main supplier, American Greetings, bought the £35 million of bank debt owed by Clinton Cards and then forced it into administration. It is now the front-runner to take on the business and, as the largest creditor, has leverage over the administrator.
At the time Clinton Cards went into administration American Greetings – the retailer’s main supplier – was already owed £16 million and has a vested interested in keeping control of the business.
A would be suitor for the company would have to offer more than £35 million to enable American Greetings to make some money back. It is thought, however, that Clinton Cards is being valued at between £10m and £20m by potential buyers, so an offer of anything more than this is unlikely to transpire.
Dominique Schurman, head of American greetings card retailer Schurman Retailer Group, which runs the renowned Papyrus Chain and is 15% owned by American Greetings, is understood to be in the UK leading discussions with Clinton Cards’ about future plans in the event that American Greetings succeeds in retaining control of the business.
The sight of Schurman at London greetings card show P G Live earlier this week further fuelled speculation that Papyrus stores might soon be appearing on the UK high street. Papyrus launched to the UK Market at PG Live 2011 and already has over 70 concessions in stores throughout the country. However, a Papyrus spokesperson who was at the company’s stand during the show denied rumours of a possible take over of Clinton Cards.
A number of other parties, including rival chains Card Factory and WH Smith are thought to still be in the running to buy Clinton Cards. Furthermore, a stake in a major retail chain may prove complicated for American Greetings, as it would be seen as a competitive move by its other retail clients, including grocers.
Whatever happens almost half of Clinton’s 750 shops are due to close, with 2,800 jobs at stake.