Clinton Cards - Another one bites the dust
From the Telegraph 09/05/12:
In 2009 it made a pre-tax profit of £24.1m on sales of £345m, an operating profit margin of 7pc. Last year it made a loss of £10.6m on sales of £364m. The change in its fortunes has been swift.
But it has been building up for a while. The company for too long was dismissive of the threat from email and e-cards, claiming most people enjoy sending and receiving real cards through the post. That may have been true a few years ago, but with high quality smart phones and slick competition from upstart rivals like Moon Pig, Clintons was in trouble. Who really wants to take a trip to an out of town retail park to buy a birthday card?
Actually, on sales of £364m, an awful lot of people, apparently.
The company reacted by launching its own e-card business. Maureen Hinton at Verdict, a retail analyst, said it was too little, too late.
Clintons has also found its business model – plastering the high street with its shops and buying up its rival Birthdays – to be catastrophically out of date. Its rental bill, at the last count, was £80m a year.
Ouch!! You’ve got to sell a lot of ‘Get Well Soon’ cards to offset that.
But that’s only part of the story, of course. Clinton’s problems are as chronic as they are endemic: the rising cost of post, the gradual decline of sending greetings cards generally, unwisely moving to the lower-end of the market in terms of quality of products, overwhelming competition from other stores (particularly supermarkets) and a staggering lack of investment in IT, their delivery infrastructure and in improving the appearance of many of their stores.
The shopping experience has been lousy for a while (as confirmed by Mary Portas
did a rip-snortas). Several of the branches I’ve visited obstinately boasted a decor from the early 1970s as though it was something to be proud of. Given the events of the last 48 hours, it looks like their business model dates from the same period as well.
The shelves seem to be increasingly chocked with Taiwanese tat and there are so many promotional stands you can’t walk around with a tube of roll-wrap held widthways without colliding with something.
My last visit also had a sting
in the tail at the till. What shopper wants to be guilt-tripped into buying a breast cancer pen as an add-on when you’ve just nipped in for a birthday card? (Anybody else had that recently?!) What I really want to know is what happened to the Wacky Weasels that used to be writhing about the floor like angry vipers waiting to strike unsuspecting shoppers on the ankle?
Current CEO (of Starbucks fame) Darcy
Bussel (ahem) Willson-Rymer has had a bit of a thankless task on his hands and, in retrospect, it proved to be the proverbial exercise in rearranging deck chairs on a sinking ship. Not only was he unable to find a buyer for the ailing sister chain, Birthdays, but Clintons has gone to the wall during his tenure as well. Everything else he has or hasn’t done at the helm there seems a bit academic now. I bet he’s wishing he’d stuck to coffee.
But hey-ho. If American Greetings buy them out, trim the fat and implement some of the IT and infrastructure changes that are decades overdue, maybe Clintons has a fighting chance of surviving for the long term. I hope so; I really want them to make it. The high street can’t take much more pummelling.
It’s grim out there, folks.