Birthdays (Ireland) Ltd is to close all its 13 stores because its British parent firm was no longer prepared to support a business that, the court heard, has been haemorrhaging money in recent years due to high rents and falling sales.
Yesterday the company, of Exchequer Place, Custom House Dock, Dublin 1, petitioned the court to have chartered accountant Declan Taite of FGS appointed as provision liquidator.
Ms Justice Mary Laffoy, said she was satisfied to approve Mr Taite as provisional liquidator to the firm. The court heard that it was envisaged that he would shut all of the stores by the close of business yesterday and preserve the stock.
The judge also made the matter returnable before the court later this month.
The company, which had been trading since 1994, operated stores in locations including Blanchardstown, Tallaght, Swords, Athlone, Limerick, Galway, and Clonmel. The chain is owned by Birthday Retail Ltd, a subsidiary of Clinton Cards plc.
Bernard Dunleavy, counsel for the company, said that while the firm had made a profit up to 2007, it had been “haemorrhaging money over the last number of years.”
It recorded small losses in 2008-9. However counsel said that last year its losses jumped to €1 million and it was expected to lose €1.5m by the end of July 2011.
Counsel added that figures had revealed that during the Christmas and Valentines days period, sales volumes were down almost 11.3% from the same period last year. Similarly, the 2010 results were down 18.2% from the 2009 figures.
Counsel said that after it began to lose money, the firm was supported by its parent company.
In a bid to save the firm all options were looked at. These including attempts to renegotiate rental agreements with its landlords and applying to have the firm placed into examinership.
Counsel said that while there was some success with three landlords, most were either unable or unwilling to agree to a rent reduction.
Counsel said that the parent company “was unconvinced” that seeking to go into examinership so that the firm could trade in the future as a going concern was feasible. It was of the view that the only realistic option in the long term was to have the company wound up, counsel added.
Counsel added that the firm wished “to act as responsibly as it can” and had paid up to date all of its unconnected creditors, including its landlords and employees. Counsel added that the firm’s only creditor was its parent company.