Administrator Zolfo Cooper confirmed yesterday that American Greetings, one of Clinton’s biggest suppliers, had paid $37m (£24m) to buy the ailing retailer’s brand and assets including 397 stores.
Clintons was forced into administration last month after American Greetings, which was already owed £25m, decided to call in a £35m loan it had bought from the card group’s lenders Royal Bank of Scotland and Barclays.
Zolfo Cooper has already shut around 350 stores employing about 2,800 full and part-time staff, cutting its estate in half.
Jones Day, the law firm acting on behalf of American Greetings, said the deal would allow Clintons to liquidate its remaining assets and pay off creditors.
The stores account for around $315m (£202m) in annual revenues.
Under the agreement, Clinton Cards still owes $19m to American Greetings, a sum that is expected to be largely repaid through the liquidation of other assets in a process that could take up to a year.
Jones Day warned that the exact number of stores acquired “will be dependent on negotiations with landlords at each respective location.”
The group, which had debts of £100m, has been struggling with competition from internet and supermarket retailers and a weak UK economy that has sapped the spending power of British consumers.
Darcy Willson-Rymer, a former Starbucks executive who was hired as chief executive last October with the formidable task of turning around the chain, had been due to present a strategic review of the business.
American Greetings chief executive Zev Weiss said: “We believe that properly managed, and with the appropriate capital structure, Clinton Cards can be both an important and profitable retailer in the specialty channel of distribution over the long term.”
ADVISERS JONES DAY
Law firm Jones Day advised Lakeshore Lending, the subsidiary of American Greetings, on its acquisition of Clinton Cards from its administrator Zolfo Cooper. The Jones Day team acting on the rescue deal included partners Corinne Ball, Michael Rutstein and Andrew Rotenberg.
Ball, responsible for the business restructuring side of the deal, led a team of attorneys representing car-maker Chrysler during its successful reorganisation in 2009.
Michael Rutstein has previously acted for Connaught and subsequently, the firm’s administrators with regard to its disposal of gas and electricity business.
Andrew Rotenberg led a team of lawyers counseling lenders and bondholders during the Autodis, Hellas, Nybron, Thomson, and Waterford Wedgwood restructurings.
Meanwhile Peter Saville, Simon Freakley and Anne O’Keefe, three partners at Zolfo Cooper, acted as joint administrators over Clinton Cards yesterday. In May last year, Zolfo was appointed as administrator to womenswear chain Jane Norman, which was sold to Edinburgh Woollen Mill, and more recently was involved in the rescue of toy-maker Hawkins Bazaar. Saville, who joined Zolfo in 1995, has been lead administrator on a number of retail deals.