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UPDATE 1-Clinton Cards sale saves 4,500 UK jobs
LONDON, June 7 |
LONDON, June 7 (Reuters) - The remaining 397 Clinton Cards stores have been sold to U.S. greeting card company American Greetings Corporation, saving 4,500 jobs, the U.S. company said on Thursday.
American Greetings, the British card and gift retailer's biggest supplier and one of its lenders, said the deal would allow the troubled British firm to liquidate its remaining assets and pay off creditors. The stores account for around $315 million in annual revenues.
"We believe that properly managed, and with the appropriate capital structure, Clinton Cards can be both an important and profitable retailer in the specialty channel of distribution over the long term," American Greetings chief executive Zev Weiss said in a statement.
Clinton Cards, headquartered in Essex, east England, was forced to go into administration last month because it could not repay a 35 million pounds ($54.1 million) loan to American Greetings.
The firm has been buffeted by competition from Internet and supermarket retailers and a weak UK economy that has sapped the spending power of British consumers.
Clinton Cards' administrators, Zolfo Cooper, said last month they had decided to shut around 350 stores employing about 2,800 full and part-time staff, cutting its estate in half.
American Greetings bought the remaining stores for about $37 million, it said on Thursday.
Under the agreement, Clinton Cards still owes $19 million to American Greetings, a sum that is expected to be largely repaid through the liquidation of other assets in a process that could take up to a year.
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