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Birthdays in administration 26 May 2009

The company said in a statement it made the “difficult decision” to end the funding of the 332-store chain, which was posting annual losses of about £7m.

Shares in the company rose 40% on the announcement.

Stylo ex-chairman Michael Ziff predicted back in February that card retailers would be the next to suffer large-scale

Zolfo Cooper have been appointed administrators and said in a statement it will “explore all options available to secure the future of the Birthdays’ business.” In the meantime, Clinton said it would be interested in buying back part of the business, reports the Financial Times. “There is a core, a central business there, a good business. The administrators [are trying to find a buyer].

A spokesman for Zolfo Cooper said it would continue to `explore all options available to secure the future of Birthdays' business'. He said: "It's still early days at the moment - we were only appointed administrators late on Wednesday night.

We are hopeful of being able to secure a buyer for Birthdays in the near future."

Clinton will definitely be in the running,” said Barry Hartog, group commercial director, according to the Financial Times.

Birthdays’ Irish subsidiary has not been placed into administration and is trading as normal, and Clinton Cards stores, which employ about 6200 people in 692 shops, are unaffected by the move.

Clinton Cards bought Birthdays in December 2004, which led to an increase in costs at the same time that competition intensified. Clinton said that putting Birthdays into administration would not have a “material impact” on trading results in the year to 2 August but the retailer expects to incur a non-cash write-down of about £44m.

It is believed that turnaround investor Endless is also looking at the business.  Over 50% of Birthdays' stores are lossmaking. 

Peter Saville of Zolfo Cooper has been appointed administrator.  Peter was previously administrator of Celebrations Group, another failed card retailer, as well as ILVA and The Works.  administrations.

 

 

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