THE high street was last night braced for another bloodbath after Clinton Cards was forced into administration, putting more than 8,000 jobs at risk.
The card and gift retailer called in administrators Zolfo Cooper when it was unable to meet demands for immediate repayment of £35m of debt.
Zolfo warned some closures are likely among Clintons’ 767 stores as it tries to find a buyer. It blamed the company’s collapse on “extremely challenging trading conditions”.
Loss-making Clintons, which also owns the Birthdays brand, has more than 50 stores in Yorkshire employing about 500 staff. Its branch in the White Rose Shopping Centre, Leeds, employs 29 staff.
The retailer has been squeezed by increased competition from the internet and supermarkets.
“It is likely that a number of stores will need to be closed in order to make the business financially viable,” said joint administrator Peter Saville. “However, Clinton Cards and Birthdays are very well-known brands on the high street and we believe that there is a strong underlying core business.”
In a statement, Clintons said major supplier American Greetings bought its debt from Barclays and state-backed Royal Bank of Scotland and demanded immediate repayment.
Unable to pay, the retailer said it had no choice but to agree to go into administration.
Essex-based Clintons joins major retailers including Habitat, Game, Barratts, Jane Norman, Focus DIY and Oddbins, which have been forced into administration during the downturn.
The challenges for retailers were yesterday underlined by new figures showing sliding sales on the high street.
The British Retail Consortium said like-for-like retail sales – or sales at stores open for at least a year – plunged by 3.3 per cent in value compared with April 2011. That followed 1.3 per cent rise in March.
The reading was the weakest since March last year and confounded analysts’ forecasts for a 0.5 per cent increase.
Mr Saville said the troubled Birthdays brand played a big part in Clintons’ demise, and cost it £130m since 2004.
He said: “Despite evaluating ways to restructure its business, Clintons was unfortunately unable to secure adequate support or funding for its restructuring plans. 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.”
Last night American Greetings said it and other suppliers stopped supplying Clintons after it missed numerous payments. It has supplied the chain for more than 40 years.
“We would like to see Clinton Cards continue as an important retailer in the speciality channel of distribution in the UK greeting card market,” said chief executive Zev Weiss, adding it could buy the business.
“We believe that properly managed, and with the appropriate capital structure, Clinton Cards could be both an important and profitable retailer... over the long term.”
Clintons said while it was “technically” in breach of some debt terms, Barclays and RBS had waived these and it had hoped American Greetings would also.
Chief executive Darcy Willson-Rymer’s strategic review is understood to have included a fruitless search for a buyer for all of the business or its Birthdays chain.
Zolfo said it will continue to trade the business while marketing it. A spokeswoman said it was too soon to pinpoint store closures.
Lee Appleton, manager of Hull’s Prospect Shopping Centre, where Clintons has a store, said: “It’s not good to see another business going into administration, but as with Game and Gamestation, which were bought at the 11th hour, there’s still a hope that they can strike a deal and hopefully continue to trade,” said.
Yorkshire is home to two of Clintons’ big greetings card rivals – Bradford’s Hallmark Cards and The Card Factory in Wakefield.