Clinton Cards, the greetings cards retailer, is poised to enter administration, continuing the string of casualties on the UK’s high street.
Zolfo Cooper, the restructuring group, has been lined up as administrator to the business, which has about 8,000 stores and employs 4,800 full time staff.
Clinton said in a statement on Wednesday morning that it was requesting a suspension of its shares after Clintons’ biggest supplier American Greetings, acquired its £35m of debt from Barclays and Royal Bank of Scotland on Tuesday night.
American Greetings is thought to have acquired the debt in order to protect its supply position in the event of a sale of the business, according to people familiar with the situation.
It is expected that Zolfo Cooper will try to seek a sale of the business, the people added. Some stores are likely to close, although it was too early to put a figure on this, they said.
A statement is expected later on Wednesday. The situation is thought to have evolved very quickly.
Potentially interested parties could include American Greetings, Don Lewin, the founder of Clintons, or some of the retail turnround outfits that have shown an interest in previous businesses that have collapsed into administration this year, retail analysts suggested on Wednesday.
Clintons said it was “not in breach of any financial covenant or repayment obligation.” However, it said it had been in receipt of temporary waivers for some technical breaches of default “related to management changes and supplier-related discussions”.
The move will ring alarm bells for retail landlords, as Clinton is a significant shopping centre tenant.
The company had been in the middle of a strategic review under chief executive Darcy Willson-Rymer, the former managing director of Starbucks UK, who joined the retailer in October. He had been due to unveil the conclusions this week.