The UK greeting card trade does not exist in

a vacuum and is affected by the general

economic factors as well as those that are

specific to the trade. The old adage that the

greeting cards industry is recession proof - a

real belief not so long ago, just like the world

was thought to be flat - has been, disproven.

Emotional Rescue was, as ever, spot on with

its witty ‘economic crisis Christmas card’

which held off on the glossy UV varnish and

opted for a cheaper monochrome ‘colour it

in yourself ’ design with the promise of

‘nothing free inside’. However, on this card

protagonists Jeff and Maud still had their

glasses more than half full of wine so things

are not too bad!

Indeed, Clintons aside (more of that

later), there have been no major casualties in

the trade in the last year –

Cardgains’ membership has

remained steady at 1,000

independent rooftops, while

The Ladder Club’s two day

seminars were still full with

would-be card publishers

wanting to join the industry,

bringing reassurance that

the new life blood is still

flowing strongly.

Obviously though, when something

major happens in any trade’s status quo - like

its largest specialist retailer going into

administrative receivership as happened with

Clintons last year - it inevitably causes

something between a ripple and tidal wave

effect, depending on your perspective.

The chain, having been

resurrected in a smaller

and more focused form,

signals additional business

for those greeting card

publishers who have been

introduced under the new

management of Schurman

Retail Group, plus has brought benefits for

those card retailers located in the vicinity

of the 400 branches that were closed

immediately. The publishing casualties that

were predicted as a result of the Clintons’ fall-

out have not materialised though it did

prompt some pretty serious financial

restructuring for a couple.

Looking slightly broader, the hefty hike

in postal charges which came into effect last

April has been deemed to have had a

negative effect, but perhaps not as

significant a one as was initially thought.

And, on a positive level it did provide

some sterling PR opportunities for

the card trade, with the media

opportunities being superbly grasped

by GCA chief executive Sharon Little.

At time of writing, it is difficult to

fully access the effect of the increased

postal charges had on Christmas card

PROGRESSIVE GREETINGS WORLDWIDE 45

State Of The Nation

All ThingsConsidered...!

Top: Is the card industry’s ‘glass’ half empty

or half full?

Left: Many a true word said in jest! Emotional

Rescue’s recent Christmas card.

Below left: Dominique Schurman unveils the

first new look Clintons store last Summer.

Below: Upmarket cards are still selling well. A

new design from Lime.

Last year’s PG’s annual article tracking of the ‘health and wealth’ of the UK greetingcard industry was entitled ‘Steady As She Goes’. It predicted that the industry mightexperience a better year in 2012 than many in the industry were expecting. In theend it probably didn’t, but in saying that, it was probably not worse. The UK greetingcard trade can’t divorce itself from the general retail economy and the UK economy atlarge, and in both cases 2012 was a major disappointment. Most people expected apick up in both, but in the end neither happened, which did not bring glad tidings tothe card trade – and added to this was the mid-year business collapse (and thenpartial resurrection) of Clintons which sent ructions through the industry.

And yet, all things considered…it could have been a lot worse.

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sending. Hopefully most of the damage will

have occurred in the low end boxed card

market, where few publishers or retailers

make much profit, rather than higher priced

and margin single cards for friends

and relations.

But all this has to be viewed against the

backdrop of the machinations at macro

level, which have a leaning on the

card trade.

This time last year the predictions for

the growth in the UK economy was for

around 1.3% -1.6% growth for 2012. In the

end (though we are still awaiting the figures

for the last quarter of 2012), it looks as if the

UK economy last year was at best flat. In the

middle of the year the nation experienced

the effects of a ‘Double Dip’ recession, and

now there is a real possibility that we could

also experience an unprecedented and

horrifying ‘Triple Dip’.

The squeeze in consumer spending as

a result of inflation stubbornly continuing to

be above the increase in wages is

something of which the greeting card

industry has no control, yet as an industry it

is dependent on consumer spending.

While, due to their relatively low cost,

greeting cards are not as prone to consumer

belt tightening exercises as other products,

they are not true necessities like food

and shelter.

This time last year there was a sense of

optimism about a gentle economic pick-up,

whereas this year sentiment is a trifle more

negative. ONS figures predict a 1% increase

in GDP in 2013, but even this seems overly

optimistic to many experts, especially if

there are more ructions in the Eurozone and

the US Congress falters on its agreements

on tax increases and budget cuts. In

essence, there is probably going to be more

economic flat lining, so the economy is not

going to help our industry out.

And added to the not so favourable

economic conditions, we have seen a

considerable shift in shopping habits to

online buying. Although the amount of

greeting cards bought online has not grown

significantly in the last year, the effects of

less traffic flow of people in

the shopping malls and high

streets ultimately mean less

sales. Moreover, whereas

the consumer may still be

buying his or her cards in

bricks and mortar stores,

some of those all important

gift sales that bump up the

average spend may have

gravitated to online.

Having said that, at

least the card trade is lucky

in that greeting cards are one of the few

items in store that are not subject to website

comparisons, and given the relatively small

cost of purchase and their tactile nature, are

unlikely to be in the future. One only has to

witness the fate of HMV, Comet and book

retailer Borders, to see the devastation and

havoc this has caused in many previously

buoyant retail sectors.

The visibility of greeting cards at retail

has taken a bit of a battering, especially in

shopping centres, with the halving of the

number of Clinton Cards’ stores. Some may

see it as natural attrition, believing the sector

to be over supplied at retail, but with greeting

cards being more of a prompted impulse buy

it relies on widespread distribution.

Sure, cards are still widely available, and

at all price points, but when 400 specialist

outlets are wiped off the scene, there are

concerns about what effect this will have

and who the benefactors will be.

Clintons’ failure elevated Tesco to the

number one spot for total greeting card

sales in the UK for the first time. Tesco has

always seemed to understand the greeting

card category better than its supermarket

peers, although expect to see a concerted

attempt at ‘catch up’ by its major rivals. It will

be interesting to see how Waitrose’s

offering and approach to the market

changes on greeting cards with the

change of category manager/broker from

Woodmansterne to Hallmark.

Of course, the elephant in the room for

many continues to be the hugely successful

value retail chain Card Factory. Now operating

from 700 stores, last year it recorded an annual

profit of £45 million – and they said there was

no money to be made in value cards! There has

however been a noticeable increase in some of

Card Factory’s price points, but the simple

strategy of publishing nearly all of its own cards,

and retailing them at extremely attractive prices

in a clean attractive shop environment, remains

the same and goes down well with a large slug

of the card buying public.

Yet at the other end of the scale, there is

continuing evidence that people in some

affluent areas and in certain outlets will pay an

astounding amount for a really special card.

46 PROGRESSIVE GREETINGS WORLDWIDE

State Of The Nation

Above: Tesco took over the mantle as the UK

retailer with the largest market share of

card sales.

Left: Chancellor of the Exchequer, George Osborne.

“The squeeze in consumer spending as

a result of inflation stubbornly

continuing to be above the increase in

wages is something of which the

greeting card industry has no control.”

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Quality handmade card publishers such as

Five Dollar Shake, Tracey Russell, Blue Eyed Sun

and Wendy Jones-Blackett continue to

prosper even though the price of a card can

be upwards of £4.

Certainly at the upmarket end, the

competitive action has hotted up, what with

WHS’ Funky Pigeon concept now trading from

around 20 stores and rumbles are that there

are more to come.

Paperchase itself is now a major player

with nearly 200 stores, while Scribbler, a chain

which has eschewed the traditional expansion

into gifts and has just focused on cards,

continues to expand in metropolitan areas.

T h e n t h e r e a r e t h e r e g i o n a l

independently owned greeting card chains

that are confident in their offer – notably Card

Bar in the South West; Cards Galore, mainly in

London; Penmark in the South Midlands;

Temptations, House of Cards and Maythers in

the Home Counties; Park Lane Cards in the

North East and Cardland in Scotland, to name

but a few. All of these have to some extent

benefited from Clintons’ failure.

Industry veteran Paul Taylor (who

historically has traded under Paper Kisses and

Card Zone) captured the headlines at the end

of last year with his acquisition of the 13

Special Occasions stores in the South-West,

thereby taking his total number of stores to

64 and marks him out as a major player in the

greeting card market.

And so what of Clintons now? There is

no doubt that the collapse was no surprise.

The writing was on the wall for all to see for a

number of months prior to last May. Many

trace the seeds of the decline back to the

acquisition and subsequent mismanagement

of the Birthdays chain, as far back as 2004. The

ludicrously high rental agreements that it had

entered into in the boom years were also

unsustainable in recession.

What was surprising though, was the

speed in which American Greetings moved in

to protect its interests and how quickly the US

retail operation, Schurman Retail Group, were

in place not just to take over the reins of the

slimmed down Clintons operation

(comprising 400 as opposed to 800 stores),

but to instigate an impressive roll out

programme of new shop formats,

dramatically revamping 100 stores in four

months. Dominique Schurman, ceo

of the chain, sent out a confident

message when she spoke on Radio

4’s Today programme on Christmas

Eve, revealing that the average

transaction value had doubled in

the new look stores and things

were on course to turn the loss

making chain back into the black

this year. Certainly, operating under

lower rents and with the new

stores looking vastly improved on

the old Clintons, the immediate

future looks secure for the chain.

Christmas, by all accounts, was not a barn

stormer, but then it was never expected to be.

On a positive note, the prevailing media

attitude towards Christmas card sending was

much more positive. The usual negative and

disruptive comments emanating from certain

rogue elements in the charity sector

regarding the monies generated by

Christmas cards sales for charities have largely

been ignored. In contrast there has been a

myriad of positive TV and newspaper stories,

with even Christmas greeting card deniers

having to admit in print to Damascene type

conversions at the last minute to Christmas

card sending this year.

So, while 2012 did not bring all ‘glad

tidings’, there are certainly some ‘best wishes’ in

order for 2013 for the industry. The world is

moving at such a fast rate as the digital age

gathers pace that little can be taken for

granted these days, but the industry is still

worth an estimated £1.5 billion a year in the

UK. Despite Facebook, Twitter and texting and

all the other multi-various forms of social

media, it still thankfully remains a vital element

in the social glue that holds us all together.

True, we have real challenges in engaging most

of the male population and the young in

particular, but haven’t we always?

So in conclusion, all things considered

things could be a lot worse.

And to end this State of the Nation on a

positive note, it was interesting to read a

comment by John O’Sullivan, economics

editor of the well-respected Economist

magazine: “For Britons scarred by two

recessions, a decent year for the economy

might be too much to hope for. But once it is

looked back upon, 2013 may seem like an

unremarkable year for the economy, with

stable inflation and output growth of close to

2% driven by the familiar engine of consumer

spending. With expectations so low, the

economy has plenty of scope to spring a nice

surprise for once.”

The greeting card industry will certainly

drink to that!

PROGRESSIVE GREETINGS WORLDWIDE 47

State Of The Nation

Where Have The Acquistions Gone?What has been particularly surprising in the last year is the

complete lack of casualties or indeed notable acquisitions in

the publishing side of our industry. Nigel Quiney acquired

the publishing interests of Abigail Mill to anchor its new Spice

Studios division, but this was not a mammoth deal, while

UKG’s sale of its Xpressions business to Only 4 U was contained

in the gift arena.

In fact, in the last 15 years you would be hard pushed to find a quieter 12 month

period on the acquisition/company closure front. Perhaps record low interest rates and

the new reluctance of banks to pull the plug on ailing companies unless strictly

necessary have helped prevent the former, while a lack of surplus available cash available

to larger companies has prevented the latter.

Above: Nigel Quiney setting up its new

subsidiary, on the back of acquiring

Abigail Mill is one of the few

acquisitive actions in the trade over

the last year.

Above: A somewhat optimistic and nostalgic view of youngsters posting

Christmas cards from a design by The Almanac Gallery.

Right: Morcombe and Wise bringing some sunshine.

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