Gift card giant Clintons has fallen back into the red after laying off hundreds of staff and closing more than 50 UK stores, as its owners grapple with its customers’ changing shopping habits.
The retailer, which dropped the word ‘cards’ from its name in 2012, has shut 71 stores since May 2022, with more than 200 staff losing their jobs as a result.
Its owner at the time, Esquire Retail, said the closures were down to “significant cost pressure” following the increase to the national minimum wage and the cost-of-living crisis continuing to impact high street footfall.
Clintons made a pre-tax loss of £5.4m in the 12 months ending May 27, 2023, down significantly from its pre-tax profit of £7.6m in the year before.
The company last made a pre-tax loss of £16.9m in the year ending November 2020.
The firm’s turnover also took a substantial hit, down 25 per cent from £130m to £96m.
Clintons’ accounts have only just been filed with Companies House, four months after the deadline of February 2024.
The company’s results for its most recent financial year are due to be filed by the end of February 2025.
The business, which was bought by Pillarbox Designs in March, added it expected to borrow £4.5m to stay afloat during the current financial year ending June 30, 2025.
Card stalwart faces ‘difficult decisions’
In a report accompanying its most recent results, the firm behind Clintons wrote: “The impact of the Covid-19 pandemic on the company has been substantial, with revenue remaining down on “normal” expectations.
“Further difficult decisions were made to reduce the store portfolio and to concentrate efforts on profitable stores.
“Concern over the cost of living increase continues to affect the wider economy and retail is no exception.
“There are an estimated 1.6 million households who have fixed rate mortgage deals that will come to an end in 2024.
Clintons has struggled to recover after more than a decade of ailing profit
“Whilst mortgage rates have eased since the summer of 2023, concern over how the likely increases in mortgage payments are to be funded from household budgets continue to impact high street footfall.
“Like many other retailers, the company continues to face significant cost pressure on wages given the increases in the national minimum wage.
“Conversely, energy costs for the business appear to be easing with the deal in October 2023 representing a material saving compared to the deal for the prior year.
“Our prime objective continues to be the provision of a one-stop shop for the customer, where they are able to purchase the card, gift and wrap solutions whatever the occasion might be.”
Who are Clintons’ competitors?
Fellow high street retailer Card Factory unveiled a 25 per cent jump in pre-tax profits to £65.6m in the year to 31 January 2024, up from £52.4m the previous 12 months.
Store sales grew 7.7 per cent on a like-for-like basis, which Card Factory said “reflected development of our store layout, customer experience and ranges, as well as annualisation of targeted price increases”.
Online competitor Moonpig, which was listed on the London Stock Exchange in 2021, made a pre-tax profit of £42m in the 12 months ending April 30, 2023, up from £40m the year before.
And while its revenue was down from £235m to £223m during that period, the company has since reported strong uptake of its new subscription service, Moonpig Plus, more than 250,000 subscribers since it launched in May 2023.
Funky Pigeon, the UK’s second biggest online card service, also saw an increase in its profit despite falling revenue.
In the year ending August 31, 2023, the retailer’s pre-tax profit hit £3.8m – up from £2.8m the previous period – while revenue dropped 8 per cent to £32m.