Cards retailer Clinton Cards has confirmed the acquisition of 196 Birthdays stores from administrator Zolfo Cooper.
The deal is valued at £3.5m, of which £3.25m will be covered by a reduction in the amount owed by Birthdays to Clinton. Clinton owned the Birthdays chain prior to its administration and will continue to trade the stores under the Birthdays fascia.
Clinton said that the purchase should be earnings-accretive. In the 12 months to August 3, 2008, the shops bought generated sales of £74m and profits of £2.7m.
Clinton Cards chairman Don Lewin said: “We are very pleased to be able to report the purchase of a large proportion of the Birthdays stores, thereby ensuring employment for 1,450 people.”
The remaining 152 Birthdays shops have been or are being shut, with the loss of 800 jobs. Property firm Jones Lang LaSalle is marketing the empty shops for Zolfo Cooper.
Clinton said that lenders whose consent is necessary for the deal have the right to be issued with warrants to acquire 2 per cent of Clinton’s shares in aggregate.
Numis analyst Nick Coulter welcomed the transaction. He said: “Benefiting from a substantial rent-roll saving, the deal is likely to contribute north of £3m to the bottom line for the year to July 2010.”