Clinton Cards braced for tough year

The greetings card and gift retailer said the tough retail environment would continue to hit trade in 2011 and that it expected a “low single digit percentage decline” in sales in the second half of the financial year.

Clinton, which employs 8,500 staff, hopes a new website, redesigned stores and key trading periods such as Mother’s and Father’s Day will offer some support to the business.

The warning came as the retailer, which also owns the Birthdays brand, reported pre-tax profits of £11.7 million in the 26 weeks to January 30, compared to £19.9 million the previous year.

Last year, the company unveiled plans for an overhaul of its stores and website in a bid to modernise the brand after a difficult year for trading.

The company will redesign four stores this year with a new layout, fixturing, colour scheme and directional signage. The new website will offer customers a personalised card service and will be accessible on smartphones.

Like-for-like sales in the first half were down 2.7% in the 700-strong Clinton Cards estate.

The Birthdays brand in the UK, which includes 156 stores, turned in a better performance, with like-for-like sales declining 0.4%.

But the Irish branch of the Birthdays business was liquidated after turning in full year losses in excess of £1 million.

Shares in Clinton Cards dropped more than 7% following the results.

Andrew Wade, an analyst at brokers Numis, slashed his pre-tax profit forecast for the the full year to July from £7.7 million to £2.5 million.

He said: “Although Clintons faces challenges, we expect the business to see benefits from its redesigned website and new store concept.”

Mr Wade added: “With independent estimates suggesting the greetings card market is still growing, we expect the business to see some benefit from these self-help measures.”