European buyout houses Permira, Cinven and Summit Partners, a US firm specialising in minority and majority investments, are among the firms to have submitted bids for the retailer, which operates some 480 stores across the UK, the sources said yesterday.

It is understood Warburg Pincus has also bid.

Husband and wife team Dean and Janet Hoyle, who started Card Factory in 1997, kicked off a sale of the business last month after calling in KPMG to advise on their options.

Summit Partners was unavailable for comment, while the other private equity firms and KPMG declined to comment.

Deal activity in the retail sector has warmed up since the start of the year, with a number of businesses including sofa retailer DFS courting deep-pocketed private equity buyers.

One of the first-round bids for Card Factory came in at about £400m, though other bids are some way below that level, one source said.

Bidders are finding the business difficult to value because it is growing so quickly, the source added.

The Card Factory is attractive because of its high margins, though prospects for future growth could be limited, another source said.

Card Factory is expected to post earnings before interest, tax, depreciation and amortisation of about £50m in the year to the end of January 2010.

The business posted profits of about £30m the previous year, according to accounts filed with Companies House.

Card Factory failed to respond to requests for comment.