Card Factory says online sales rose sharply as a result of Covid-19 lockdown and that its shops are now recovering faster than expected. Long-term it now aims to make 20% of its sales from a mix of online and multichannel sales and sales via third-party retailers.
The greetings card and gift retailer said in a trading update today that it expects revenue to come in at about £100m in the first half of its current financial year, which runs from February 1 to July 31. That’s down from £195.6m at the same time last year.
Online sales from its Card Factory and Getting Personal websites are both trading well ahead of the same time last year, with like-for-like sales up by 68.9% for the current financial year to July 19, compared to the same period last year. During the period its shops were fully closed, from March 23 to June 14, online sales rose by 120.7% on last year. Since they have started to reopen, online like-for-like sales have stayed 60.5% ahead.
Card Factory, ranked Top350 in RXUK Top500 research, has so far reopened 1,015 out of a total of 1,018 shops since its closed its stores in March and says that like-for-like sales – a metric that strips out the effect of store openings and closures from the comparison – have so far exceeded initial expectations, at 21.6% lower than a year earlier rather than the expected 50% drop. The retailer says that while it seeing fewer people in store in line with falling levels of footfall, those shoppers who do visit are spending 24.9% more, on average.
The retailer furloughed staff while its stores were shut and is also taking measures to reduce costs, including deferring rents, VAT and some supplier payments while also improving its terms with suppliers. It now has net debt of £144.2m and is eligible to access finance from the Covid Corporate Financing Facility if necessary.
Card Factory is to set out its targets for the 2025 full-year at a capital markets day briefing today. By 2025, it aims to grow annual revenues to about £635m, of which 20% will come from a broadly equal split of online and multichannel sales, and retail partnerships such as the one it currently has with Aldi in the UK. By then it also aims to have about 5,600 distribution points in the UK and beyond, of which about 1,100 will be group operators stores. It is also aiming to take 45% of the market for UK card sales.