Clinton Cards today revealed plans to snap up one of its major rivals in a £27.5m deal which will reinforce its position as Britains top specialist greetings card retailer.
The company wants to buy GSG Holdings, which operates under brand names including Strand, Papertree and The Greetings Store.
This would add 211 stores to its network and give it a stronger presence in some parts of the UK. Currently Clinton has around 500 outlets.
GSGs shops are mostly in shopping centres, high streets and the centres of small and medium-sized towns.
Clintons chairman, Don Lewin, said that buying GSG will let attain a level of expansion which would have taken a number of years to achieve organically. “It will also increase our presence in Scotland and Northern Ireland, where we only have a limited representation.”
To help pay for the purchase, Clinton is placing 8.8m shares to raise £10m.
News of the planned acquisition came as Clinton produced an improved set of interim results. In the six months to August 2, its pretax loss fell to £595,000 against £1.7m in the same period last year.
Continuing turnover rose to £73.9m from £61.3m.
The company stressed it was normal to make a pretax loss for this part of the year – last year it made a healthy full-year pretax profit of £7.6m.
Mr Lewin described the interim figures as an “extremely good performance” and added: “The board feels very positive about the important Christmas trading period and expects to report further significant progress at the year end.”
Shareholders will see their interim dividend go up to 1p from 0.75p last time.
EGi News 16/9/98
The Press Association
