18 May 2012
From Commercial Property Blog
Clintons: Shoplifters of the world unite
The Smiths song ‘Unhappy Birthday’ opened with the lyrics: “I’ve come to wish you an unhappy birthday / Because you’re evil and you lie / And if you should die / I may be rather sad, but I won’t cry.”
That was how most people felt when Clintons finally folded yesterday.
The 44-year-old retailer - named after founder Don Lewin’s son, Clinton - was as much a part of Britain’s social fabric as Kenny Dalglish and Maggie Thatcher. Like Morrissey, they all enjoyed their peak periods in the eighties. (And are seemingly also living in denial for some time as well.)
But while King Kenny is still fondly remembered by the Reds as Thatcher is by the Blues, the nation’s favourite card store seems to have folded with all the joyful whoops rusually reserved for the kind of tabloid-drubbing dished out to Rebekah Brooks.
Perhaps it was because this – more than any previous administration – had been such a long time coming. There wasn’t a landlord, investor or journalist who hadn’t seen the crows circling since Birthdays was put into administration three years ago, almost to the day.
What was almost as amazing, was the hilarious spin machine put into action (probably by the administrators’ PRs) that placed rumours that WHSmith was apparently “considering” a bid for Clintons. Having successfully pulled rabbits out of hats year after year, Kate Swann, on what must surely be a similar knife-edge of dwindling consumer demand, would surely be nuts to take on more high street exposure?
It was what Clintons did when it splashed out over £46m on Birthdays in 2004, let us not forget, in spite of the internet clearly starting to hit traditional postal greetings. When Clintons put the firm into administration just five years later, the writing was on the wall with a giant great bunny stapled to the front.
And while this went on, with debts being run up all over the show, why was no restructuring put in place then?
Some have criticised the banks for displaying this same lack of ‘moral responsibility’ pulling funding. Indeed, there’s a large dose of irony seeing the slivery George Osborne bang on about supporting British firms while our State-backed banks fund private equity groups as they asset-strip once successful businesses, having pulled the rug from the principle company executives.
But when your shareholders are the public and the retailer is so clearly buried, it’s a hard for one to argue.
Of course, the major problem was Clintons’ paying over the odds for plump spots on the high street – something American Greetings clearly needed to fix when it bought the company and subsequently called in its debts. And with other firms teetering on the edge over the summer, the rebasing of high street rental values could continue for some time.
At the end of the day, successful enterprise comes down to the balance of risks. The current insolvency epidemic swings that too far in one direction. A large creditor higher up the food chain may get a few million pounds, while SME unsecured creditors will be lucky to get paid anything. The hit for them will be far worse as a result.
If no one can trust anyone to pay, that itself undermines the very enterprise we keep telling ourselves will get us out of recession. If we’re serious, maybe we need to change the record on insolvency regulation?