GREETING cards seller Clintons has revealed plans to shut one in five shops, in a last attempt to save the company.
Clintons called a town hall meeting on Friday to warn landlords that it urgently needs to close 66 out of 332 sites to avoid a collapse.
It also wants landlords to slash rent prices on the remaining shops, moving 206 shops to a model where rent payments are linked to the store's performance.
This would mean that Clintons would only pay full rent on 60 remaining shops.
Restructuring documents, seen by the Sunday Telegraph, said that "approximately 90 of the company's stores are currently loss-making with the business forecasting that sales will continue to decline."
And consultancy firm KPMG has been appointed by Clintons to explore restructuring options, including investigating the possibility of a Company Voluntary Arrangement (CVA).
A CVA is a controversial restructuring measure that lets businesses continue to trade whilst also closing stores and pushing through rent cuts.
A spokesperson for Clintons told the Sun: "Discussions are continuing with our landlords but no decisions have been made".
Clintons has reportedly said landlords can air any objections to the restructuring plan before November 20.
What is a Company Voluntary Arrangement?
DIRECTORS can propose a Company Voluntary Arrangement (CVA) when their firm is experiencing difficulties in paying its debts
It means the company is essentially entering into a legally binding agreement with its creditors, which could include suppliers or landlords.
It enables a company and its creditors to come to a compromise agreement and avoid an administration or liquidation.
A CVA can provide a company with some breathing space to allow it to reorganise or restructure its funding and/or its operations with as little disruption as possible.
The board will review any feedback it gets and decide whether to launch a CVA on November 18.
If landlords block the CVA, Clintons is thought to be considering putting the whole company into administration, an outcome that would put 2,500 jobs at risk.
Landlords have become increasingly frustrated by the liberal use of CVAs among flagging businesses.
One Clintons landlord told the Times: “They will need everything to align for them if they are going to have any chance of surviving.
“Frankly, this looks like a sticking plaster and they could end up in administration before they know it.”
Another told the BBC that although there was a meeting with Clintons last week, very few details of the restructuring plan were given.
Clintons, which was previously known as Clinton Cards, had previously appointed KPMG advisers to explore a potential sale, but it is believed that no acceptable offers were received.
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