Card and gift retailer Clintons is poised to close additional stores as it continues to contend with declining foot traffic and an increasingly unstable trading environment. This announcement was made during a financial update this week, where the company highlighted ‘significant cost pressure’ stemming from rising employer national insurance contributions and wages.

Clintons, which once boasted a portfolio of about 1,000 stores at its peak, has scaled back significantly to around 170 locations. This reduction follows a series of closures aimed at eliminating ‘loss-making stores’, with the retailer having shut 38 outlets and laid off more than 300 employees in the last financial year ending June 2024, leaving it with a workforce of 1,415. During this challenging period, an insolvency court had approved a restructuring plan designed to stabilise the company’s operations.

The retailer remarked on the ongoing volatility in the high street, stating, “The high street continues to be unpredictable and the company is seeing reduced footfall in the stores year on year.” In light of these challenges, Clintons continues to assess the performance of its remaining stores, opting to close underperforming locations, which, although may have a negative impact on turnover, is expected to bolster profitability in the future.

Despite grappling with increased costs, the company indicated that energy expenses had begun to decline following a favourable agreement in October 2023, which represents a considerable saving compared to the previous year’s pricing. However, the recent changes to both national insurance contributions—rising from 13.8 per cent to 15 per cent—and the reduction of the wage threshold from £9,100 to £5,000 will further stress the finances of numerous businesses. Additionally, the national minimum wage has increased to £12.21 per hour, with those aged 18-20 seeing their wage rise by £1.40 to £10 per hour.

Earlier this month, Clintons reported a return to profitability following a turbulent period that included store closures and the restructuring process. For the financial year ending 29 June 2024, the retailer announced a pre-tax profit of £8 million, contrasting sharply with a £5.3 million loss the previous year. However, sales dropped 14 per cent, declining from £96.5 million to £82.6 million.

In a recent development, Clintons in Keighley, West Yorkshire, confirmed it will close its doors permanently on 14 June. The specifics regarding which additional stores might be at risk remain uncertain at this time.

The financial landscape for retailers in Britain has become increasingly daunting, characterised by escalating costs and fierce competition, alongside consumers facing tighter discretionary income. Recent Eien, fashion chain Quiz entered administration in February, leading to the closure of 23 stores and the loss of nearly 200 jobs. The brand was subsequently acquired back by its founding Ramzan family, who retained 42 locations, safeguarding approximately 1,300 jobs.

Simultaneously, WH Smith, a long-established fixture on British high streets, is also undergoing substantial change as it prepares to transition its stores to Modella Capital, the owner of Hobbycraft. While the Post Offices located within some WH Smith outlets will remain, the stores will be rebranded as TGJones.

In parallel, the Post Office has announced its decision to franchise 108 crown branches, with around 1,000 employees offered the option to either transition to the new owners or accept voluntary redundancy.

Source: Noah Wire Services