In another blow to the British High Street – the embattled greetings card chain Clinton is being forced into administration, putting eight thousand jobs at risk.
It was the family firm which became the leading name in Britain’s greeting card business: at its peak, Clinton cards had almost a thousand stores across the country, and twenty five percent of the market.
Founded by Don Lewin in 1968, the company went from strength to strength, buying out Hallmark and Carlton cards, floating on the Stock Exchange, and rapidly expanding its turnover to more than three hundred million pounds. Just seven years ago it bought up rival card chain Birthdays, riding out the downturn by selling affordable gifts.
But when the fall came, it came quickly. A pretax profit in 2009 of more than £24 million, turned into heavy losses within two years. This January, the firm posted a pretax loss of £3.7 million, while its shares had lost eighty percent of their value since the start of 2010.
Clinton had simply failed to keep pace with the times, and failed to spot the growing threat from emails and e-cards, believing people would still want to send and receive cards in the post. They were wrong.
More efficient, slicker rivals like Funky Pigeon and Moonpig swooped in to steal the online thunder, while the cut-price Card Factory, which was started by a husband and wife team from the back of a van, set up hundreds of high street stores, while managing to undercut Clinton on price.
Too late, Clinton launched its own e-card range: but it had missed the party. Instead, Moonpig with its infuriatingly catchy jingle and aggressive marketing strategy, which enjoyed the boom. Thanks to its unique personalised card offering, efficient production and wide ranging brand recognition, Moonpig has become one of Britain’s fastest growing companies, worth more than £120 million.
Clinton had been due to publish the results of a six month review, carried out by chief executive Darcy Willson-Rymer, an attempt to forge a new strategy to deal with the competition and turn its fortunes around.
But its fate was sealed after its banks, Royal Bank of Scotland and Barclays, sold its £35 million in loans to its biggest supplier, American Greetings. When the US-based firm said it intended to enforce the loan, administration was the only option.
Now, eight thousand jobs are at risk as Clinton’s administrators search for a buyer. Staff have been told to turn up for work as normal, although it is feared that a number of stores will have to close to make the business financially viable.
It is another blow to the British High Street, already reeling from the collapse of well known chains like Blacks, Peacocks and the video games retailer Game Group. Alan Sugar vented his disappointment on Twitter, commenting: “wow end of an Era where the internet kills another retailer”.
In fact April has been a particularly bad month for the High Street, with retail sales hit by the unusually bad weather. Like-for-like sales were down 3.3 per cent compared with the same month last year, with sales of footwear showing the worst performance.
Stephen Robertson, from the British Retail Consortium, said people were being extra cautious about their finances: “consumers, struggling to balance their household budgets, remain reluctant to spend unless they really have to”.