Outrage over Clintons’ £13.5m profit after administration
Landlords lost out after unprofitable Birthdays stores were closed then bought back, says property federation
Clinton
Cards has been blasted for what was described as a “phoenix
administration” by the British Property
Federation (BPF) after the group made a £13.5m profit from
subsidiary Birthdays stores.
The federation was indignant at Clinton Cards’ profit, after unprofitable
Birthdays was put into administration and stores were closed, before Clintons
bought some back at a profit.
The information was disclosed in Clinton’s annual results, and sparked anger
among landlords represented by the federation. Clinton Cards put all 323
Birthdays stores into administration in May with the loss of 750 jobs, but
re-acquired 196 stores a month later.
BPF chief executive Liz Peace said: “This underlines why many landlords feel
aggrieved by the insolvency process. The issue is that insolvencies like this
are a charter for failing businesses to walk away from legally binding contracts
without paying a penny, while everyone else – like the 750 people who lost their
jobs – has to accept the consequences of bad business decisions.”
“When firms claim hardship and then buy themselves back saving millions of
pounds or start expanding again with rights issues and new stores, the
likelihood is that landlords will stand firm for the sake of not wanting to
annoy the rest of their customers,” she added.
Further reading:
Credit crunch fears grow for
Clinton Cards