W H Smith is interested in buying up some of the failed Clinton Cards stores following the chain’s collapse, according to the Sun.
The high street and travel books and stationary retailer refused to comment this morning (11th May) on the report that it is "one of several interested parties" to have contacted the card chain’s administrator Zolfo Cooper. A spokeswoman for Zolfo Cooper said a “significant number of parties have expressed an interest”, but refused to confirm the identities of the potential buyers.
W H Smith bought online card operator Funky Pigeon in 2010. Funky Pigeon now has nine physical stores, and sells cards in over 1,000 of its stores.
According to the Sun report, any rescue of Clinton Cards would be likely to involve a maximum of half its network of 767 stores. If W H Smith were to buy 350 Clinton Cards stores, it would boost its high street total by over a third, bringing its total number of stores to around 960.
A source quoted in the newspaper said: “W H Smith’s interest has taken people by surprise. It could be a protective move but they’ve been expanding into this space.”
W H Smith’s expansion of its high street arm by a significant number would come as a surprise as the chain’s strategy has been to open stores at a measured pace, mainly in small market towns where there is little other competition. However the move could stop its card rival The Card Factory gaining significant competitive ground.
The Card Factory and American Greetings are both rumoured to be interested parties.
Clinton Cards fell into administration on Wednesday (9th May) after racking up over £100m in debt. The chain currently employs 8,000 staff.
Peter Saville, joint administrator and partner at Zolfo Cooper, said: “Despite evaluating ways to restructure its business, Clintons was unfortunately unable to secure adequate support or funding for its restructuring plans. The challenging business environment, and in particular the increased competition for greetings cards and related products, meant that the Group required radical restructuring and administration was the last remaining option available".
He added: "It is likely that a number of stores will need to be closed in order to make the business financially viable. However, Clinton Cards and Birthdays are very well-known brands on the high street and we believe that there is a strong underlying core business. We are therefore confident that it is an attractive proposition for a range of potential buyers and welcome expressions of interest from third parties.”