Clinton Cards deal to be struck within days

Clinton Cards looks likely to be bought out of administration by the end of next week if not earlier as would-be suitors jostle to take control.

Administrator Zolfo Cooper aims to sell the business by June 8, it is understood. At the time of publication, sources indicated that a sale could come even earlier.

Clinton Cards supplier American Greetings, which bought the retailer’s £35m bank debt before forcing it into administration last month, remains the front-runner and, as the largest creditor, has some influence over the administration process.

Any other bid would have to top £35m for American Greetings to step aside because that would ensure the US firm clawed its money back. However, it is understood that Clinton Cards is being widely valued by potential buyers at between £10m and £20m, so an offer of that scale is unlikely to materialise.

Dominique Schurman, the boss of US greetings cards retailer Schurman Retail Group, which is 15% owned by American Greetings and runs the US Papyrus cards chain, has flown to the UK to lead talks with Clinton Cards’ head office team about how it might take the retailer forward if American Greetings secures a deal.

Former Clinton Cards boss Darcy Willson-Rymer hoped to attempt a buy-out of the business but was unable to raise funds, sources said.

Up to a dozen parties lodged first-round bids last week, including Card Factory and WHSmith as well as investment firms Endless and OpCapita.

A “small number” of interested parties were still in the frame a source said. “American Greetings is not the only bidder,” he insisted.

American Greetings has a vested interest in acquiring Clinton Cards – the retailer is an important route to market in the UK, and the supplier was already owed $25m (£16m) by Clinton Cards at the time of its administration.

A leap into UK retail by American Greetings could put its other supplier relationships here in jeopardy, according to industry sources. It is thought some grocers have warned American Greetings that they may stop doing business with it as it would be regarded as a direct retail rival.

Separately, Hilco has been hired to manage the closure of almost half of Clintons’ 750 shops, affecting 2,800 jobs.

All parties declined to comment.

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Posted on May 31, 2012, in Other. Bookmark the permalink. Leave a comment.

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