Card Factory today set out the effect of five months of store closures on its business in its latest full-year. Online sales grew during the year by 42% to £27.6m – but store sales fell by 41.3% to £251.9m.
Ecommerce grew strongly at both Card Factory (+ 135.3% to £11.1m) and at Getting Personal (+12.2% to £16.5m), but that wasn’t enough to make up for Covid-19 lockdowns that meant the retailer’s more than 1,000 shops were closed for an average of five months in the year to January 31.
That was reflected in its figures, which show revenue of £285.1m in the year to January 31 was 36.9% down on the £451.5m a year earlier. Within that, store sales fell by 41.3% to £251.9m from £429.0m, online sales grew by 42% to £27.6m from £19.4m, and revenues from retail partnerships grew by 83.3% to £5.6m (£3.1m previously). Pre-tax profits were 125.2% down at £16.4m, from £65.2m last time.
Investing in multichannel
The retailer now says that it is seeing improvements in trading following a July 2020 shift in strategy. That strategy is based on prioritising cards in its range, on the multichannel principle of being available wherever and however customers choose to buy from it, and on having a scalable business model.
During the year the retailer relaunched the Card Factory website on a new platform in order to meet increased demand and to improve the customer experience. It also launched iOS and Android apps in December 2020. It says 9% of online sales now take place on its apps, which also generate 45% more repeat orders than its website.
Card Factory chief executive Darcy Willson-Rymer says: “Since joining Card Factory in March 2021, I’ve been immensely encouraged by what I have seen and heard. We have successfully reopened our entire store estate following the third lockdown and delivered a reassuring performance in stores, whilst maintaining online momentum.
“Our powerful brand and unique business model means we are well placed to respond positively to the changing retail environment and to unlock the inherent potential in this business. The recent refinancing provides sufficient resources for us to do that by building on our excellent platform to drive future growth. I am excited about the opportunities ahead.”
Since the end of the financial year, the retailer was able to reopen its shops in April, and says that initial pent-up demand has now steadied, with its performance now in line with expectations. Every day cards and party ranges are both selling strongly, with customers spending more on less frequent visits.
In May 2021, the retailer refinanced, putting debt facilities of up to £225m in place. Card Factory is now looking to raise equity of £70m as it looks to reduce debt levels.
Card Factory is a Top500 retailer in RXUK Top500 research. It sells online and, at year end, from 1,016 shops following nine store openings and 15 closures.