Loss-making Birthdays put into administration

MORE than 2,000 jobs are in jeopardy after the retailer Clinton Cards decided to put its Birthdays business into administration.

Clinton said more than half of Birthdays’ 332 shops were loss-making and it could no longer support the subsidiary which was losing £7m a year. The shops will continue to trade.

Birthdays was founded by Bury entrepreneur Ron Wood in 1975. He sold out to investors in 1996 and went on to pursue a career in property development. The business still has its head office in the Greater Manchester town.

Essex-based Clinton Cards bought the business in 2004 for £46.4m from the Scottish entrepreneur Tom Hunter. In a statement the group said Birthdays’ sales performance has been improving but it has been losing money for the past five years.

It said: “Given the current economic uncertainty and the structure of the Birthdays’ business, the Clinton board believes there is little prospect of Birthdays generating a profit in the near future. 

It added: “The board therefore believes that placing the business into administration is the right course of action as the funding of the ongoing losses of Birthdays has become unsustainable.”

Clinton expects to incur a non-cash asset write-down of approximately £44m associated with the move.

Chairman Don Lewin said: “It is with deep regret that we have taken the decision to place the Birthdays’ business into administration… Nevertheless in the current environment, the group cannot sustain supporting losses of approximately £7m a year at Birthdays with limited opportunity to improve on that performance in the foreseeable future.

“Although this has been an extremely difficult decision it is my genuine belief that there is a significant element of the Birthdays’ business that will have a profitable and sustainable future and there are still opportunities to make it a success. 

Without the Birthdays business Clinton Cards has 692 stores and 6,200 staff.