Flying Brands to close Greetings Direct business

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Date: Friday 04 Jul 2008

LONDON (ShareCast) - Jersey-based home shopping group Flying Brands is to close down its Greetings Direct business after expansion plans in the US flopped.

The group has been trying out the Greetings Direct format in the USA but the response rates have been “extremely disappointing”. The US operation has been closed down with immediate effect, while the UK and Australian operations, which are expected to make a loss this year and show little prospect of recovering next year, will be wound down over the next 12 months.

The decision to close the operations is expected to result in a £11.5m hit to earnings for the impairment to the value of the goodwill and intangible assets of Greetings Direct.

Additionally, the board is taking the precaution of making a provision for future losses and closure costs of the Greetings Direct business of about £1.7m. This is likely to have depress pre-tax profits by around £1.5m this financial year.

Trading in other parts of the group are in line with expectations and as indicated in the group’s trading update on 29 May 2008.

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