Card Factory today reported rising sales and a return to profitability as shoppers returned in-store in the wake of pandemic trading restrictions – while continuing to buy more online than they did before the pandemic started.
The retailer is investing both in its stores and in multichannel services as it looks to improve the service it offers customers who are now more likely to buy online.
Card Factory today reported revenue of £364.4m in the year to January 31. That’s 28% up on the £285.1m it reported a year ago. On a like-for-like (LFL) basis, which strips out the effect of store openings and closures, sales were 3.9% lower than the previous year. Pre-tax profits came in at £11.1m – a rise of 167.7% from the pre-tax loss of £16.4m it reported a year earlier.
Card Factory said the revenue rise came as shoppers returned to stores during the year as lockdown restrictions eased. Store sales rose by 33% to £336m in a period when shops were open for 20% more days than the previous year. In the run up to Christmas, in-store sales were close to pre-pandemic levels. At the same time, online sales fell by 13.5% LFL, with a smaller decline at the Card Factory website (-1.5% to £10.9m) than at its Getting Personal site (-21.6% to £12.9m). Overall, online revenue was 135% greater than two years earlier – before the pandemic started. This, says Card Factory, reflects the expansion of its online product range and the improved customer experience as well as customers’ shift online. Some £4.6m in revenue came from partnerships with third-party retailers. That’s £1m – or 18% – less than in the previous year and was mostly attributed to restrictions affecting its customer, The Reject Shop, which is based in Australia.
Card Factory chief executive Darcy Willson-Rymer says: “We saw a steady recovery in store performance as lockdown restrictions eased, particularly in the run up to Christmas with store sales approaching pre-pandemic levels in this key trading period. As we reopened our stores, we saw our online performance decline slightly year on year; however, we remain greatly encouraged that our Card Factory online sales were significantly ahead of pre-pandemic levels. This year will see us make further progress in developing our customer proposition, through a broader product range and improved online experience, as part of our transition to a leading omnichannel retailer.
“Looking forward, we remain confident our revenue levels for next year will continue trending towards pre-pandemic levels. We have taken pre-emptive action to help mitigate the inflationary pressures we are seeing across the business and we will continue to monitor and respond to developing macro-environmental pressures. Our focus is on creating opportunities across our store estate while building out our wider capability which will allow us to deliver our strategic initiatives and drive growth at pace.
“We enter the year ahead with confidence in our ability to deliver our plan for FY23. We remain excited by the growth opportunity ahead and continue to focus on implementing changes to enable us to deliver on our transition from a store-led card retailer into a market leading, omnichannel retailer of cards and gifts.”
Card Factory’s leadership team is set to be strengthened with new appointments including chief information officer, digital director and customer marketing director. The company also aims to manage costs while raising some prices in order to maintain profit margins.
Multichannel strategy
The retailer plans to move both its websites onto a single platform, reducing costs and expanding the range of gifts sold on the Card Factory website. It will also trial click and collect on both its website and app as it starts to offer services across its sales channels.
As its new ERP system moves into a second phase of implementation, Card Factory will soon be able to see stock across channels, enabling it to offer further omnichannel services and respond to shopper buying behaviour, as well as to integrate with both UK and international partners.
In-store plans
Card Factory opened its ‘model store’ with improved customer flow and store navigation in Coventry in February. The retailer says results have been promising and that it will use its findings to roll out the format further next year. In the meantime, it plans to open its first stores in central London and will continue to open shops in the Republic of Ireland – adding to the 14 that it already operates in the market. By the end of the year it had 1,020 shops following a net four openings.
Sustainability
Card Factory says it is making process in becoming a carbon neutral business. It is on track to reduce waste and improve sustainability, with a target of 90% of products being free of single use plastic and of glitter by the end of 2024. At the same time it is working on a diversity, equity and inclusivity strategy.
Card Factory is a Top250 retailer in RXUK Top500 research.
