Clinton Cards has insisted it will ride out the downturn as it renegotiated its lending terms and paid its quarterly rent bill in full.
The retailer also said it has noticed an “upside” from the demise of Woolworths and Celebrations, and that its Birthdays chain in particular “picked up a bit” as a result.
The retailer has extended its £72m revolving credit facilities to July 2012 and said the “£60m working capital tranche will continue”. Its banks agreed to postpone the final £12m instalment of the £60m from November this year until December 2011.
Group commercial director Barry Hartog said: “We’re feeling pretty good about the new banking covenants. The plan we put to the banks gave them confidence.”
Hartog said the discussions were “tough” but that completing them in “two months is good going”.
In the 26 weeks to February 1 adjusted operating profit at its Clinton Cards brand slumped from £25m to £17.9m, while its Birthdays brand made a loss of £2.7m, compared with £1.1m profit the previous year. Hartog said Birthdays will focus on its product offer in an attempt to return to profitability.
Group like-for-likes dropped 5.2 per cent in the period, but remained flat in the seven weeks to March 22. Total group revenue for the 26 weeks was £243.3m, compared with £256.9m last year, as a result of closing 70 stores and reduced footfall.
Hartog said the retailer has “always paid rent on time” and that he would be “talking with landlords” about future rental terms.
He also said some of the retailer’s suppliers have had credit insurance scaled back, but he hoped the new banking facility will help with this.