marktime1231
05 Dec 2019
Clintons Cards about to collapse So Clintons gets saved (for now) by a pre-pack administration. Which means it has bought itself … I wonder about the precise terms, all a bit tricky. Most sense from the grauniad: "The pre-agreed deal with the chain’s existing US owners comes after Clintons failed to win support from landlords for an insolvency procedure known as a company voluntary arrangement (CVA) under which it wanted to cut rents and close up to 66 stores. The loss-making company has been suffering from heavy competition from discounter Card Factory and began sounding out landlords last month about a restructure. The pre-pack administration deal will secure jobs for the group’s entire workforce and mean all its stores continue to trade, but wipes out tens of millions of pounds of debts owed to suppliers. The administration will also reset leases enabling the company to renegotiate rents or pull out of stores in the new year." Not sure if I fully understand this. There is or is not a discount on its store leases? How does it reset the leases, because of a change of ownership on paper? 60 or 70 stores will still close or not? Which suppliers might not get their debts paid, er isn’t American Greetings the owner and supplier? Who were the creditors who have been stuffed by this? How can anyone trust the handshake of CEO Eddie Shepherd again? Anyway, a shame Card won’t get a Christmas boost from Clintons closing down. I wonder what will happen in the New Year to make Clintons a going concern, this could just be postponing the inevitable.
paddingtonbear
20 Nov 2019
Like for Like or Don't Like Good day Games. Gave up on these a while ago as they continued to plough their field without what I considered changed circumstances. This fixation on 1200 sites is absurd, by definition the next 50 must be worse locations and opportunities than the previous ones and just adds low or nil growth at slender margins. Worse, debt rises. They claim a quality angle being introduced, well I didn’t see it when venturing in shops this year. I would much prefer what I perceive as a bargain 10 different xmas cards + envelopes in a pack for say £3.99 rather than 10 all the same design or obviously low quality 30 card packs for less. How many people actually send 30 cards or want the same design for every friend or relative? Having established a significant market share they need to be paying off debt and not catering to bargain basement only clients now. Margins and group proifits could benefit. The online offering is nothing to be proud of either. End of unseasonal whinge! PB
Gamesinvestor1
14 Nov 2019
Like for Like or Don't Like Looks like all the fall is due to the falling like for like sales [link] I guess the analysts don’t have much sympathy if your existing business isn’t growing, even if it is still profitable. Games
marktime1231
13 Nov 2019
Clintons Cards about to collapse Rather unpleasant plunge today, at one stage down to the all time low of around 150p, ahead of a trading announcement tomorrow. A twang if the news is decent?
marktime1231
06 Nov 2019
Clintons Cards about to collapse A snippet yesterday (which I can’t find to link today, aaagh) said that Clintons were considering some store closures and some CVAs to reduce its costs. That sounds like a sticking plaster solution from the KPMG restructuring team, who must have found there is no obvious buyer for the business as a whole. Why isn’t American Greetings, the owner of Clintons, on the hook for the lease obligations? If American Greetings has to close some of the 330 Clintons stores because they are not profitable, surely American Greetngs needs to pay for the costs of restructuring … it has had plenty of revenue from its subsidiary over the years. We should not be picking up the tab. By “we†I mean CARD shareholders … why should our stores pay full rent while the Clintons store across the street gets a discount so that they can keep their store open.
marktime1231
14 Oct 2019
Clintons Cards about to collapse No more news on Clintons but I saw an article on Card Factory in the FT last weekend. For some reason written up as a retail Small Cap which is a bit harsh since CARD has a £450M turnover. The article did not conclude either way but seemed to suggest things were positive in an otherwise gloomy sector. Cash flow good, hence another special. As Bill points out the weak exchange rate is killing profitability, par is about $1.34 so we want more of the sterling recovery we saw briefly last Friday. Stockpiling for Christmas at $1.23 will not help the bottom line at all. For some reason the FT say strategy is shifting to retailing through third party outlets, which are indeed being pursued but actually the main strategy for UK and Ireland remains to increase own stores to 1200. Something which the 2018 report admits will add scale rather than margin. No mention of the imminent demise of Clintons the effects of which still need to be priced in. The FT also said net debt of £317M was a worry. Well actualy net debt is really only about £170M, the rest is a measure of the retail lease exposure. But it is a worry.
NewBill1703
06 Oct 2019
Clintons Cards about to collapse Guitarsolo: If Clintons did fail, I think CARD should just look to increase its market share organically. It wouldn’t be hard, just identify the successful Clintons stores and up the ante for the nearest Card Factory shop. Or, if that closing store is in the vicinity of one of the 250 planned Card Factory openings, move that store opening timetable up to get in there quickly. Yes, I don’t think there is anything to buy from Clintons? A different business model, much lower margin, and I doubt they have any of their own freehold stores? CARD is doing fine - organic growth still within expected levels, rolling out new stores at a measured pace. No reason to doubt they will continue to take market share steadily (if not rapidly) as the footprint and brand recognition grows. The main headwind to earnings has been a very unfavourable FX backdrop - for three years now. At some point, we must hope, that will begin to reverse, at least somewhat. At that point, not only will reported profits be heading upward, but I think the market will have cause to reconsider the lowly valuation of a high margin and highly cash generative business model.
marktime1231
28 Sep 2019
Clintons Cards about to collapse No Card will not be a likely bidder for Clintons, but I was wondering who might. Whether Clintons finds a buyer which collapses the retail presence or Clintons simply goes bust it should help Card but I suspect not by much. If Card increases its retail without taking on too many more of its own outlets that would be good for the bottom line. However it has declared a strategy to continue opening new stores. So more debt, up to £200M or so, in return for growth of about 5%, but costs eroding net earnings. What restricts Card ability to raise prices and margins to counter extra staff and input costs is the awkward number of me-too look alike greetings outlets offering cheap stuff under a pink banner. And those with a bob or two still go into Oxfam for expensive cards-with-a-conscience at Christmas. I don’t know how Card breaks these constraints to become a real winner again but it is just about doing ok so I am holding in the hope it enjoys a boost from those struggling even more.
Guitarsolo
28 Sep 2019
Clintons Cards about to collapse MT, thanks for the posts. Has much happened in the last 2 weeks that you are aware of? Personally, I don’t think CARD has the balance sheet to take on anything. They’ve always run it with a fair amount of debt on the books and I think that prohibits taking on more. Even if it could, the move could be blocked by regulators worried about too much control. If Clintons did fail, I think CARD should just look to increase its market share organically. It wouldn’t be hard, just identify the successful Clintons stores and up the ante for the nearest Card Factory shop. Or, if that closing store is in the vicinity of one of the 250 planned Card Factory openings, move that store opening timetable up to get in there quickly. I’ve only got a small stake in CARD but am generally impressed that the management seem to keep the profits at a reasonable level for now. What happens when you can’t open many more stores I don’t know. Guitarsolo
marktime1231
14 Sep 2019
Clintons Cards about to collapse Recent financials for Clintons not available. In the year to Jan 2018 they made a £4.2M loss on sales of £189M. In the year to Feb 2017 they made a £36.7M loss on sales of £201M. Assuming recent trading is in line with those figures it means Clintons have about £530K revenue per store. In comparison Card Factory have revenues of about £450K per store across approx 972 outlets (but make a profit). Card Factory latest goal to expand to 1200 stores might be achieved at a stroke if it could cherry pick a couple of hundred from Clintons and close the rest. What would you pay to acquire that portfolio if you were Karen Hubbard and where would you get the money, noting the brands mean different things to different customers, noting that Card Factory like to manage its own manufacturing and supply chain in order to minimise input costs, and noting that Card already has debt of £150-180M due to investment in the store opening programme. Or do you just let Clintons fail and try and capture spillover revenues, noting that Card Factory has modest organic growth of 2-3%pa before you factor in new stores and Aldi outlets. Clintons latest published strategy was to “rightsize†its cost base and sell off old stock. My guess is that in the last 18 months they have seen a further decline in revenues to £160-180M and further losses of £10-20M … anyway bad enough to have triggered this reaction. Retail consumer footfall in places where Clintons has stores has continued to drop off and it is unlikely to have been able to get much reduction on its lease renewals (or we would have heard about it). That constraint probably why they have pulled in KPMG … to sell or a packaged administration. If you were American Greetings (Clintons owner / supplier) you would also be sensitive to the £:$ exchange rate. Would you be putting a price tag on Clintons or would you pay someone to take it off your hands … a sale to Card Factory would not appeal because it would inevitably be replaced as supplier. Which other (UK) retail group in this sector has the money or the appetite for Clintons? On a global basis Hallmark has about 30% of the manufacturing of greetings market, American Greetings about 22% and Card Factory about 6%. Completely dropping out of the UK market would be a big blow to American Greetings, it would be desperate to agree an outlet deal maybe through a surpermarket or department store chain? You would have to be a pretty brave PE investor to take this on, but the weak pound and a sweet deal from American Greetings in exchange for continued supply agreements might sway an overseas someone espcially if that someone thinks they can do something about lease rental costs. In 2018 the UK arm Hallmark Cards Plc made a loss of £1.6M on revenues of £134M after a 5.3% decline in sales over the year. It says that is about a 22% share of the domestic retail market and it claims to be debt free. Not clear how many Hallmark branded franchise outlets there are, it describes its own employees as being in marketing and distribution, so I think Hallmark is wholesaling its products and channelling through places like Marks & Spencer rather than operating its own retail stores. I am sure it is a pure coincidence that KPMG are Hallmark’s auditors/accountants/advisers.
marktime1231
13 Sep 2019
Clintons Cards about to collapse A snippet today that Clintons has called in advisers KPMG to try and sell off the 334 store chain. Observed to be the second largest card retailer after Card Factory with 950+ stores. Not sure how Clintons has remained open the last couple of years their shops have been so quiet and the financials must be dreadful. Can’t imagine who would be a buyer either … a few Clinton stores might be in top locations, but why saddle yourselves with all the other unwanted rental space at a time like this. Ashley might be mad enough. Or a step up from a Card Factory rival, there are several small challengers offering a me-too shopping experience. Could be good news for Card Factory if it takes the No 2 rival out of the market?
Gamesinvestor1
26 Sep 2018
1/2 yr results Not too pretty, but also not as bad as the share price suggests :- still generating a good business Financial Metric H1 FY19 H1 FY18 Change Revenue £185.3m £179.6m 3.2% like-for-like (0.2%) 3.1% (3.3 ppts) EBITDA* £29.9m £32.8m (8.9%) operating prof* £24.5m £27.7m (11.6%) Operating prof £29.0m £24.6m 17.9% profit bef tax* £22.7m £26.3m (13.9%) Prof before tax £27.2m £23.2m 17.2% Under BasEPS* 5.31 pence 6.19 pence (14.2%) Basic EPS 6.38 pence 5.45 pence 17.1% Leverage* 1.76 x 1.50 x The Board continues to expect underlying EBITDA for the full year to be in the range of £89m to £91m · Interim dividend of 2.9 pence (FY18: 2.9 pence) · Special dividend of 5.0 pence per share (FY18: 15.0 pence), a return of £17.1m to shareholders; consistent with our capital policy · A total of £295.4m returned to shareholders via dividends since IPO in May 2014 Games
Gamesinvestor1
09 Aug 2018
Card Factory Soi – Doing fine m8 – yes a lot have left, seemingly permanently – don’t see much of Bill or LK and quite a few others. CF has indeed been hit hard – I’ll probably add to this today. I bought DOM back the other day on the drop and that’s recovered very nicely. I had sold it at 336 some time back in 2017 but at 286 it seemed like a steal and so be it - it’s now 301.3 in 2 days trading and divi due on 16 August. Are you still in Lloyds? – seems stubbornly down in the low 60’s - I went against my better judgement and bought a bank lol !-- with divi so far it’s about break even but I think I should wise up and get out altogether in case the economy blows - which it could well do with Trump slapping tariffs on all and sundry. Games
soi
09 Aug 2018
Card Factory Hi Games Sorry, only just saw your post. You are right, I spend less time here. I do still read a fair bit. More posting on barcplus board. Mostly using Money AM for news and fundamentals. Also read on advfn, member there but rarely post. CARD down big today, I think oversold. Have bought a couple of share tranches, just today. 195.7 & 192.9. I think it will recover at least some of the drop. Since the discussion forums change, many of the boards here have become a waste land. Sad really. Hope you are doing OK. ATB & GL soi
Gamesinvestor1
17 Jul 2018
Card Factory soi – don’t see you much on these boards anymore - I guess like a lot of others you have moved on. Games
