Clinton Cards in turnaround struggle

Embattled retailer's chief completes review after failed bid to sell company
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The Independent Online

Clinton Cards, the troubled card retailer, is battling to safeguard its future after attempts to sell the company, or parts of the group, came to nothing.

The listed-group, which operates 628 Clintons stores across the UK, is considering an insolvency procedure to jettison scores of shops, in an effort to turn around its dire performance.

Darcy Willson-Rymer, the chief executive since October, completed his strategic review of the business on Friday and he will now present his findings to investors and other stakeholders over the coming days. But he appears to be running out of options – apart from a long, arduous turnaround of its performance – after two sets of advisers failed to sell its 139-store Birthdays chain or the wider group, which would have taken it private after 24 years.

This has put the spotlight firmly on the accountants KPMG, which Clinton Cards also hired as an adviser recently, with a company voluntary arrangement one of the options on the table. If a majority of creditors agree, the procedure would potentially enable the card group to slash its annual rental bill and offload large number of stores.

Clinton hired a restructuring team at Ernst & Young to sell its loss-making 139-store Birthdays chain but found no takers. Advisers at Rothschild had also tried to find potential buyers for the whole group. KPMG, E&Y and Rothschild declined to comment.

A spokesman said: "The strategic review has now been completed and our chief executive is in the process of discussing its conclusions with key stakeholders."

Mr Willson-Rymer is expected to provide more details on his strategic review at its interim management statement on 10 May.

Clinton Cards sunk to a loss of £3.6m over the half-year to 29 January, following a profit of £11.7m for the same period a year ago.

Its founder Don Lewin is to step down as chairman in July. Shares in Clinton Cards closed at just 7.70p on Friday, giving it a market capitalisation of just £16.31m.

Meanwhile, Home Retail Group, the owner of Homebase and Argos, is expected to unveil full-year profits down by nearly two-thirds to £100m and axe its final dividend.

HRG has suffered falling profits for five consecutive years, largely dragged down by tumbling sales at Argos. The catalogue specialist hired John Walden, the former Best Buy executive, as its new managing director in March, and he is set to come under pressure to close a substantial number of Argos's 750 stores.