Birthdays Ltd. History

Company Perspectives:

The Birthdays Group is the leading retailer of greeting cards and related products in the UK. Birthdays is building on its background of solid retail experience and is able to offer you many new and exciting ventures. Our new concept stores are designed to provide you with a unique shopping experience, combined with the best possible prices! No ifs, no buts! We aim to provide only quality products. Birthdays' goal is to be as famous for its service to its customers, as it is for its high quality shops and 'value for money' merchandise.

Key Dates:

1966:

Ron Wood and wife Gail establish a wholesale greeting card and gift wrap business.

1969:

The company is incorporated as Ron Wood Greeting Cards Holdings.

1975:

The first three retail stores are launched.

1986:

The Birthdays retail format is launched.

1996:

The company changes its name to Birthdays Greeting Cards after Wood sells out to a management buy-in.

1999:

3i becomes a major investment, with a 39 percent stake.

2000:

The Ecardsforyou.co.uk web site is launched.

2001:

The Party Land retail format is launched.

2003:

Tom Hunter and Chris Gorman acquire control of Birthdays.

2004:

Birthdays is acquired by Clinton Cards.

Company History:

Birthdays Ltd. is one of the leading retailers and wholesalers of greeting cards and related gifts in the greeting card-made United Kingdom. Indeed, the United Kingdom is said to boast the world's highest per capita greeting card market, sending an average of 52 greeting cards per year. Based in Bury, near Manchester, Birthdays operates more than 500 stores throughout the United Kingdom and Ireland, selling an extensive range of branded and own label greeting card designs. The company also sells party supplies through a second retail format, Party Land. In addition to its U.K. and Irish networks, Birthdays operates five stores in Cyprus. The company, which originated as a wholesale supplier of greeting cards and gift wrapping in the 1960s, maintains this activity and is one of the United Kingdom's leading suppliers to supermarkets, department stores, and other retailers. Rising greeting card sales at supermarkets, however, have placed Birthdays under pressure to maintain its market share. To shore up its position, the company agreed to be acquired by rival Clinton Cards at the end of 2004. Birthdays is expected to remain a separate business, positioned at the value end of the sector to complement Clinton's own mid-level to high-end customer target. Clinton also has pledged to expand the Birthdays chain to more than 600 stores into the second half of the 2000s. Birthdays last reported sales of £144.7 million ($228 million) in 2003.

Wholesale Greetings in the 1960s

Britain's passion for greeting cards stretched back to the 1840s when Sir Henry Cole commissioned artist John Calcott Horsley to engrave and color 1,000 cards as a means of replacing the letters Cole habitually wrote to send holidays greetings. Cole then sold the leftover cards for a shilling each. The idea caught on quickly, helped by the passage of the Postage Act of 1846 three years later. That legislation reduced postage on letters to just one penny.

The United Kingdom remained one of the world's largest markets for greeting cards into the second half of the 20th century. Yet the greeting card industry itself remained relatively modest in comparison with its booming growth toward the end of the century. A significant factor in the rise of the greeting card industry in the United Kingdom was the appearance of the first dedicated greeting card shops at the end of the 1960s. The new retail market in turn stimulated the demand for new greeting card designs and, especially, the development of a whole new range of "occasions" for card giving.

The rising demand in greeting cards, and the new retail outlets, opened opportunities in the wholesale sector as well. In 1966, husband-and-wife team Ron and Gail Wood launched a wholesale business providing greeting cards and gift wrap to retailers in the region around Manchester. The Bury-based business not only handled greetings cards from the major publishers, it also began designing its own cards. The company incorporated as Ron Wood Greeting Cards Holdings in 1969.

Witnessing the success of the greeting card retail sector, the Woods decided to enter that market as well. In 1975, the company opened its first three Ron Wood Greeting Cards stores in the Manchester area. The company's format proved a strong success and by the mid-1980s, the company had opened more than 30 stores. The company also opened its first purpose-built warehouse and office facility in Bury, with some 180,000 square feet of space. That site also served as an introduction into the property development market for Ron Wood himself.

A significant milestone in the company's development came in 1986 with the launch of a new format for its retail operations. Called Birthdays, the new stores featured not only greetings cards and gift wrap, but also gifts and, of importance, party supplies. Over the next decade, Ron Wood Greeting Cards added to its range of retail merchandise, and Birthdays stores came to feature goods such as plush toys, ornaments and decorations, and novelty items.

New Owners in the New Century

The expanding range of greeting cards--celebrating a raft of newly invented holidays such as Secretaries' Day and Grandparents' Day, as well as cards celebrating unlikely occasions such as divorces--provided the foundation for the growth of the retail greeting card industry. At the same time, a new generation of greeting card publishers, many of them small companies, enabled stores to fill more shelf space and to attract a more diversified customer base.

Ron Wood profited doubly from the rising interest in greeting cards. On the one hand, the company's wholesale wing developed a new market providing greeting cards to confectionery shops, as well as to newsstands and tobacco stores. The company's retail side, meanwhile, began a national expansion. Helping to fuel the group's growth was its decision to sell its Bury headquarters and warehouse facility, in a sale-leaseback arrangement that gave the company the capital to invest in new locations.

By the middle of the 1990s, the company operated nearly 400 stores, including 50 franchised stores, throughout the United Kingdom and in Ireland. With sales of more than £99 million (approximately $160 million), the company was able to claim a leading share of the British specialist retail greeting card market.

The success of the Bury headquarters and warehouse development, and its subsequent sale, encouraged Ron Wood to launch a new career as a property developer in the mid-1990s. In 1996, Wood decided to sell most of his holding in Ron Wood Greeting Cards to a management buy-in led by John Lovering, formerly with the Tarmac Group, backed by Prudential and Schroders. The deal cost the buy-in team some £90 million.

Following the acquisition, the company's name was changed to Birthdays Greeting Cards Ltd. Lovering now led the company on a new expansion drive, promising to boost the group's retail network past the 500 mark in the early 2000s. In 1999, Birthdays took on additional capital backing when 3i paid £25 million for a 39 percent stake in the company.

The company also began looking for new business opportunities at the dawn of the 21st century. In 2000, for example, Birthdays launched a new web site, Ecardsforyou.co.uk, created by design consultants Tableau, in order to capture the rising interest in virtual greeting cards. The site included a library of more than 1,000 different cards, including greetings featuring animations and videos. Birthdays also sought to capitalize on its successful range of party supplies. In 2001, the company launched Party Land, a retail format focused on the party planning market. The first Party Land opened as a section of a Birthdays store in Solihull in 2002. By the beginning of 2003, the company began making plans to roll out the Party Land concept to other stores in the Birthdays chain.

Yet Birthdays had been struggling in the early years of the century. While the company's revenues remained strong, topping £144 million in 2003, its profits were slipping. At the same time, the company's market share was being eroded by new competition from the supermarket sector, as well as by the rise of new challengers, especially Clinton Cards. That company, which laid claim to have founded the United Kingdom's first specialist greeting card shop in 1969, had grown rapidly though the 1990s. A series of large-scale acquisitions, including the purchase of Hallmark's U.K. retail network, had boosted Clinton's own network to more than 600 stores. In 2002, Clinton even approached Birthdays with a buyout offer reportedly worth some £100 million. The two sides, however, were unable to reach an agreement.

In September 2003, 3i and Birthdays' other investors instead sold the company to Scottish entrepreneur Tom Hunter, in partnership with Chris Gorman, owner of the Gadget Shop chain of retail novelty stores. The pair paid an estimated £60 million to acquire the company, and began making plans to cross-market Birthdays' and Gadget Shops' product ranges in each other's stores. Hunter and Gorman also attempted to reposition Birthdays by launching a new value format of discount greeting card stores.

Hunter and Gorman soon discovered that Birthdays required a larger capital injection than they were willing to provide. In November 2004, the pair announced that they had agreed to sell Birthdays to Clinton Cards for a total of just £50 million. Although Clinton declared its intention of retaining Birthdays as an independent operation, the group nonetheless was able to claim a combined retail network of more than 1,200 stores and a leading market share of more than 21 percent. The two formats also were in large part complementary, with Birthdays pegged to fill the niche of lower-end and value cards, while the Clinton Cards format targeted the mid-level and upper-end markets. With its own 40th birthday approaching, Birthdays appeared set to remain a fixture in the U.K. greeting card market.

Principal Subsidiaries: Party Land.

Principal Competitors: Card and Party Stores Ltd.; Clinton Cards plc; Retail Variations plc; QD Stores Ltd.; David Patton Holdings Ltd.; Rippleglen Ltd.; Retail Stores plc.

Further Reading:

• "Birthdays (Stationery and Gifts)," UK Retail Briefing, October 2003, p. 73.
• "Birthdays Takeover on the Cards," Printing World, September 11, 2003, p. 10.
• "Clinton Cards Launches Birthdays Acquisition Bid," UK Retail Briefing, December 2004, p. 22.
• Creasey, Simon, "Wood Work: After Catching the Property Bug While Running National Card Retailer Birthdays, Ron Wood Has Turned Himself into One of the North's Top Developers," Property Week, January 30, 2004, p. 89.
• Moore, Sheryl, "Birthdays Takes Greeting Cards Back to 1966 Prices," Manchester Evening News, December 1, 2003.
• Nelson, Fraser, "Happy Pounds 90m Return for Birthdays Group," The Times, October 22, 1996, p. 29.
• "Prudential and Schroders Wrap Birthdays Buyout," European Venture Journal, December 1, 1996.
• Wallop, Harry, "Scotland's 'Richest Man' Loses Millions by Selling Birthdays," Daily Telegraph, November 19, 2004.

Source: International Directory of Company Histories, Vol. 70. St. James Press, 2005.