Clintons on brink of administration
The retailer, which operates 628 Clintons and 139 Birthdays stores, has requested that its shares be suspended on the London Stock Exchange.
But whereas the banks waived certain loan conditions, American Greetings has said it will push the company into administration today.
Clintons is the UK's biggest card retailer and employs more than 8,000 staff.
It is understood that administrators would continue to run the stores as normal while seeking a buyer for the business, but a large number of stores could be closed. Its fall into administration would be another blow to the high street after recent high-profile casualties, including video games retailer Game Group, fashion chain Peacocks and outdoor specialist Blacks Leisure.
Clintons has suffered dire trading in recent months as it comes up against stiff competition from supermarkets and online retailers such as Funky Pigeon and Moonpig, which sell personalised cards.
It recorded a pre-tax loss of £3.7 million in the 26 weeks to January 29, compared with a profit of £11.7 million in the previous year, and warned that the second half of the year would be below expectations. Its shares have lost more than 80% of their value since the start of 2010. It revealed more poor trading for the 14 weeks since January 29, with same-store sales down 3.5%.
Chief executive Darcy Willson-Rymer has been carrying out a strategic review over the past six months, which is understood to have included a fruitless search for a buyer for all of the business or its Birthdays chain.
The group said it was not in breach of any financial covenant or repayment obligation but the banks had waived "technical breaches of default" related to management changes and supplier-related discussions. It had believed that American Greetings would extend the support to the company if it bought the loans, but it was told that it would enforce the conditions of the loan.