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Online drives sales growth at Card Factory as footfall weakens

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Ecommerce sales lifted by 25% at Card Factory, helping the retailer grow its first-half revenues by 5.5%. However, pre-tax profits were 14% lower compared to the same time last year.

The retailer, ranked Top500 in IRUK Top500 research, today reported revenue of £195.6m in the six months to July 31, up by 5.5% on the same time last year after six months in which the retailer opened 26 new shops. Online sales at were 25% up on last time, while like-for-like sales – which strip out the effect of store and business openings and closures – were up by 1.5%, recovering from a fall of 0.2% last time. In-store sales alone grew by 1.2% LFL. Pre-tax profits of £24.3m were down by 14.4% as costs, including the National Living Wage and investment online and in new stores, rose. 

Card Factory chief executive Karen Hubbard said record sales over Valentine’s Day and Mother’s Day came with “an increasingly challenging UK high street environment and consequent weaker footfall”. 

She added: “We are pleased with the progress made on the strategic initiatives that are underway. These include using consumer insight to develop our customer proposition across all channels and a number of commercial partnerships. Maintaining a sharp focus on the execution of these various initiatives is a key priority for the senior leadership team.”

Online strategy

Card Factory has invested in its online team ahead of launching a new web platform and website, which will sell an increased range. It is now working to improve visibility of its multichannel offer, while focusing on its position in online search.

Sales at sister website, were down by 10.4% in the half-year as a result, it said, both of price competition and changes to Google algorithms. The company is now investing in redesigning the site to focus on premium custoers, while increasing its marketing through social media and overseas.

Store sales

Card Factory has analysed EPOS data in-store and across channels to understand and redesign underperforming ranges. But it said that while the growing use of contactless card payments in store improved the customer experience, the trend added to its costs since merchant fees were rising too. The retailer is also selling through in stores run by partner retailers. It has agreed to supply 440 Aldi stores – half of the supermarket’s UK estate – from November 2019, and it will supply all 360 stores operated by The Reject Shop in Australia from January. It is also trialling concessions in Matalan stores and said it was in discussions “with a number of other potential retail partners in the UK and overseas.”

Card Factory traded from 991 stores in the UK and seven in the Republic of Ireland as of July 31. It has ongoing plans to open about 50 new stores in the UK and Republic of Ireland.

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