Clintons on brink of deal to salvage 2,500 jobs

The immediate future of Clintons, the UK’s second-biggest independent greeting cards retailer, is being salvaged through a restructuring that will keep its stores trading during the crucial Christmas period.Sky News has learnt that Clintons is on the brink of announcing a pre-pack administration that will see the company sold back to its existing owner.
The transaction, which could be unveiled as soon as Wednesday afternoon, will mean that the chain’s 334 shops remain open during its busiest month of the year.If confirmed, it will preserve 2,500 permanent jobs – with Clintons’ workforce increasing to 3,200 people during the festive trading period.

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The calamitous state of the high street has prompted desperate pleas for help from retailers

A notice of intention to appoint KPMG as administrators is understood to have been filed on Wednesday morning.

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The pre-pack process will see Clintons sold to Esquire Retail, a new company set up and controlled by the Weiss family, which has owned the business since 2012.
It comes after several months of talks in which Clintons explored a sale and then negotiated with landlords about the launch of a company voluntary arrangement (CVA), which would have entailed store closures and rent cuts.

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Sources said that the CVA proposal had attracted some support from landlords, but not enough to guarantee that a vote would pass.A pre-pack administration is expected to pave the way for further bilateral talks between Clintons and its store-owners next year, they added.Wednesday’s developments will mark the second time in seven years that Clintons has been forced to resort to insolvency proceedings.The greeting cards business is increasingly vulnerable to online disruptors, although high street rivals such as Card Factory have continued to perform well.Under the leadership of Eddie Shepherd since 2017, Clintons’ financial performance has seen an improvement, with losses falling last year from the £14m it recorded in the year to February 2018.Roughly 70 loss-making Clintons stores have already been closed over the last five years.Clintons and KPMG declined to comment on Wednesday afternoon.The brief stint in administration will add Clintons’ name to the ranks of retailers which have struggled to stay afloat in 2019.Mothercare recently placed its UK arm into administration and announced that its shops would close, while Debenhams, Jack Wills and Sir Philip Green’s Arcadia empire have either turned to CVAs or fallen into administration as they have grappled with brutal trading conditions.The calamitous state of the high street has prompted desperate pleas for help from retailers, with a committee of MPs concluding this week that the business rates system needs an urgent overhaul.Figures compiled by PricewaterhouseCoopers showed recently that shop closures reached their fastest rate in nearly a decade during the first half of this year, with an average of 16 shutting every day.
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