Clinton warns outlook worse than it feared

 
Kasmira Jefford
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CLINTON Cards warned yesterday that the outlook for the full financial year was worse than previously expected as the ailing greeting cards and gift retailer slumped to a first-half loss.

The firm, which runs 628 Clinton Cards stores and 139 Birthdays outlets, said its strategic review – led by new chief executive Darcy Wilson-Rymer – was on target for completion at the end of April.

Wilson-Rymer, a former Starbucks executive who joined the retailer in October, faces the formidable task of turning around the chain, which has been struggling its way through tough trading conditions as well as intense competition from supermarkets and via the internet.

The group made a pre-tax loss of £3.7m in the first half of the year to 29 January compared with a profit of £11.7m in the same period last year.

Revenue fell 4.5 per cent to £197.1m, with sales at stores open more than a year down 1.1 per cent, while profit margins fell due to old stock, which had to be cleared in its January sale.

While like-for-like sales were up 11.8 per cent in the first eight weeks of the second half, the retailer warned that this reflected Mother’s Day being two weeks later last year. After adjusting for the timing of Mother’s Day, the underlying trend is down four per cent. “The outlook for the second half of the current year is below our previous expectations but the changes we are undertaking to the business will deliver significant benefits in future years,” Wilson-Rymer said.

Clinton is examining the potential sale or restructuring of its struggling discount chain Birthdays as part of its strategic review.

Analysts have questioned the future of a card retailer in a digital age, while others added yesterday that the 14p increase in stamps is likely to hit Clinton Cards hard.