news review Cinton Cards
So where do we go
from here?
Clinton Cards’ one-two with Birthdays had the industry
gasping for breath. But now that the dust is settling what
kind of card chain is going to emerge and how will it
compete in a rapidly changing marketplace?
Lewis Eckett reports.
ack in March when
B
Clinton Cards was
renegotiating an exten-
sion to its banking and
loan facilities, few in
the industry anticipated
the retailer putting its
Birthdays chain into
administration.
Although banks aren’t supposed to meddle in the
affairs of the businesses they lend money to there’s
few doubts that doing something about Birthdays
was a prerequisite of the new fi nancial arrangements.
The subsequent buy-back of 196 stores was equally
obvious given the fact that the biggest creditor in the
Birthdays fi asco was Clinton Cards and it would be
effectively paying itself for taking them back.
The City applauded the deal: the share price
jumped and the Government breathed a sigh of relief
as 1400 people kept their jobs.
Some in the industry opined that the audacious
move was out of character for Clintons. “Not its will need fi rst class Now, however, the convenience mantle is being
style.” they said loyally. Unfortunately ‘style’ has planning and direction. taken up by the supermarkets who know the key
nothing to do with it these days, not when the likes No one GT talked to retail is generating footfall. Tesco for instance is
of Woolworths are going to the wall and competitors to thought Clinton was already using greetings cards displays sited near to
like Celebrations are shutting up shop. When the in any danger in the checkouts to drive incremental sales and is promoting
chips are down ‘style’ pretty much goes out of the short term, but there heavily on key seasons.
window. are concerns about the Clinton is going to have to work very hard to
Having lost a lot of money in Birthdays over the longer-term prospects retain its mid-market customer base against the
years, Clinton will be glad to draw a line under the for the UK’s biggest pulling power of the multiple grocers, both in terms
debacle. Even better, it has emerged from the mess independent chain of of price and convenience. At present Clinton’s price
with an enhanced balance sheet as profi ts for the card shops. difference is probably not a compelling enough
group are almost certainly set to rise due to much argument to overcome the shelf-to-basket-to-car
lower losses. Having renegotiated the leases of the Market position mentality of the mass market shopper.
Birthdays stores it has ‘bought back’, these outlets Clinton Cards by defi nition occupies a big spot in the
will be traded hard for cash over the next 18 months. middle of the market and has done very well out of it Product offer
Clinton has played a smart game since the start over the years. One area where Clinton could make substantial
.co.uk
of 2009. It went to the bank early to sort out the
That strength isn’t going to be eroded overnight changes is in its product offer.
fi nancial side and took strong, effective action on
but what Clinton has to hope is that there are At the moment there’s too much of a ‘me too’ look
Birthdays and has emerged stronger for it.
enough customers in the middle who will reject the about the Clinton offer compared to other retailers.
But can it last?
discounters at the bottom and ignore the higher priced The centralised buying structure at Clinton has
Many in the industry are less than confi dent about
product in the top end independents and smaller allowed it drive huge economies of scale but has
Clinton Cards’ long-term prognosis. They feel that
multiples. left the retail offer looking staid staid and formulaic
eetingstoday
without radical change the chain will be unable to
Another element of Clinton’s strength is its with product that consumers can fi nd elsewhere very
.gr
compete against the rising competition from the
ubiquity on the high street - you can always fi nd a easily.
supermarkets and value retailers like Card Factory. If
Clinton Cards - and that convenience factor has been Clinton’s buying strategy is unlikely to change
Clinton is to overcome these challenges the business
www
a major force in its success. very soon and its sale or return terms for many
16
www.greetingstoday.co.uk
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