Card Factory today said that its online sales grew strongly during the year – but lower footfall to stores meant that its overall like-for-like sales stayed flat. Growth came as the retailer opened new stores, a strategy that helped it to grow its market share in the singe card market.
The retailer, ranked Top500 in IRUK Top500 research, saw online sales at its cardfactory.co.uk website rise by 56.3%. It said that the website attracted new customers to the brand, and also gave it the opportunity to introduce new products that were not available in store. But new stores remained its biggest growth store, with 51 opened during the year – taking it to a total of 972 in the UK and Ireland.
The retailer developed new routes to market, including a partnership with Aldi and the opening of its first franchised store, in Jersey, during the year, as well as extending its store numbers.
However it said that a decline in sales at gettingpersonal.co.uk was disappointing, as discounting in a competitive environment and the cost of customer acquisition led to a reduction in earnings.
Revenues of £436m were 3.3% up on the previous year, with like-for-like Card Factory sales down by 0.1%. But pre-tax profits of £66.6m were down by 8.3% on last time.
Chief executive Karen Hubbard said the retailer had delivered a robust performance for the year, with like-for-like sales flat “despite a tough consumer environment”. She added: “Our focus has been on continual improvements to our customer offer, producing better, more innovative ranges of everyday and seasonal cards and maintaining our quality and value positioning, while also being more efficient and driving savings across the business. EBITDA [earnings before interest, tax and depreciation of assets] for the year however, was impacted by lower footfall and Getting Personal’s disappointing performance.
“We continue to look to leverage our unique, vertically integrated model to improve our competitive advantage and drive margins. We have further initiatives planned for the current year which will bring further production back to the UK, whilst also implementing additional plans that will allow an improved focus on customer service in store.
“New stores remain our biggest growth channel, and we opened a net 51 in the year, with a good pipeline going forward. We are now also exploring other opportunities to extend our reach beyond 1,200 stores in the UK and internationally to drive profitable growth. Encouragingly, some initial trials with Aldi in the UK, in an Australian retailer, and with a franchise partner in Jersey show that the Card Factory brand is a footfall driver that has real resonance; we will pursue these types of opportunities to open new routes to market where we see attractive returns.”
Image: Screenshot from Cardfactory.co.uk/InternetRetailing Media