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Swimmers needed Urgently
Below: Paperchase’s Ilkley store. Bottom: Emotional Rescue’s David Greaves (right) and Brett Smith (left) with Martin Nevin (second left) and Clintons’ Ruth Young.
It never rains, but it pours, reflects Cardsharp. The greeting card industry and retail sector have been under considerable pressure. And if you have not got ownership of a very big umbrella, you are pretty much sure to get wet! Or as the philanthropist businessman Warren Buffett said, “It is only when the tide goes out, you see who is swimming naked”! A wave of unsettling news has come in various shapes and forms. Firstly, the continued speculation over Paperchase has put a blight on many smaller publishers’ moods (and indeed some quite large ones too) for whom the weekly sizeable Paperchase orders and resultant monthly cheque have become a lifeline. Certainly the news that the Creditors Voluntary Agreement (CVA) has, (bar formalities), gone through ensures Paperchase’s future and takes the industry’s blood pressure reading down a tad. All suppliers seem to be being paid to terms, which must be such a relief. But the uncertainty over the last three months has not been good for the trade. Some of the media comments have been
PROGRESSIVE GREETINGS WORLDWIDE
misleading or just down right wrong. For starters Paperchase is not ‘heavily lossmaking’. Even last year, if its private equity owners had not taken a hefty amount of cash out, it would have made a profit, a small one, but still the right side of the line. It was the greedy hands of its private equity major stakeholders that left Paperchase short of liquidity. Let us hope they don’t make the same mistake again. But with private equity owners you just never know what will happen!
Then there was the sad news that a long-established traditional greeting card publisher, Grass Roots International, had to cease trading and, as PG went to press, was facing liquidation. No one saw that coming! The traditional wordy end of the greeting card market has held up well up to now and the owners and management of Grass Roots were wellrespected for knowing their stuff. True, it was an open secret that the business had been on the market, so the fact that the business went down without a satisfactory exit for the owners put a shudder through the industry. The greeting card industry is awash with rumours of businesses being up for sale, but valuations have dropped substantially, and there seems to be very few potential buyers out there. It is not like in the 1990s when the big two American players, Hallmark and American Greetings (then the sole owners of UKG), were seemingly snapping up every sizeable publisher that moved. In fact Cardsharp struggles to remember the last supply side acquisition of any note, other than the unique example of David Greaves reacquiring Emotional Rescue, earlier this year. Now, with all the under currents in the macro business world, even some of the big