Clintons to close a fifth of its stores to avoid folding
Card retailer Clintons is set to close around a fifth of its stores as it looks to avoid insolvency.
An insolvency court gave the go-ahead for the for a restructuring plan which will see Clintons shut the doors to 38 of its 179 stores due to the financial pressures it is currently under.
Under the proposal, Clintons will pay only 8.6 pence on the dollar for the money it owes landlords and local councils for its 38 unprofitable stores.
The card retailer’s owners, Jeff and Zev Weiss, will provide a revolving loan facility to help keep the business afloat over the next 12 months.
As the retailer’s main creditor, they have also agreed to reduce the amount of money they are owed by Clintons from £7.7m to £5.3m – the amount they would have received had the business fallen into collapse. In return, they will receive a larger amount of shares.
Under the restructuring plan, the Weisses would only continue funding the business if it adopted a business plan which showed signs of greater profitability. With the closures of the loss-making shops it is hoped this may be achieved.
However, the business could be at risk of insolvency again when the loan expires in 12 months if its fortunes do not change.
Clintons had previously looked to secure a company voluntary arrangement in an attempt to cut rents and shut up to 66 of its stores, but failed to get the backing of its landlords.
The retailer had reportedly been considering a partnership with stationery retailer Paperchase, before the brand was bought out of administration by Tesco leading to the closure of its stores.
Clintons has suffered in recent years due to competition from cheaper alternatives and online rivals such as Moonpig. The retailer was previously bought out of administration in in 2012, and then again in 2019. The latter transaction saved 332 stores but lead to the closure of a significant number of shops.
In the past 18 months, Clintons has permanently closed branches in locations such as Dorchester, Bolton and Ayr.