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How Card Factory aims to emerge from Covid-19 with a more multichannel business

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Card Factory today said that it would continue to develop its strategy of making its products available to customers however they want to buy – whether that’s online, in a shop or via a third-party retailer. Coming out of lockdown, it is looking to develop new innovative ways for its customers to buy that will enable them to visit shops less often while spending more. 

The retailer, which published full-year results today, is to start reopening its shops slowly from June 15, starting with just 10% as it starts to emerge from a coronavirus lockdown that has seen it furlough 90% of its staff. Card Factory says it will make sure its first shops to open meet Covid-secure requirements before it opens more. “It is clear that in some shops social distancing will impact the number of transactions that we are able to deal with; however our teams are looking to introduce innovative ways to process customer transactions to optimise sales in stores including helping customers reduce the frequency of their visits but increase the average basket value in each shop,” it said in its full-year results statement today. “We will conclude the learnings form our trial stores and then roll out future store openings in line with Government guidance.”

In the meantime, sales via its websites have surged during lockdown, with cardfactory.co.uk sales up by 302% since lockdown, and by 153% in its year-to-date. At gettingpersonal.co.uk sales have been up by 68% since lockdown and 27% year-to-date. The retailer will build on that in its current financial year by launching a new Card Factory website on its new platform that will support new multichannel services. It is currently testing in-store ordering and printing and selling product bundles, among other measures. Its customer service team now works across channels, “to ensure our customers are treated as individuals rather than according to the channel they shopped.” However, as yet only 8% of card sales are made through its website, and Card Factory aims to grow its online presence through a new website in the first half of its financial year, while using its store estate to deliver omnichannel services.

Card Factory has opened a second fulfilment unit in Wakefield in order to support social distancing. At the same time, sales through its third-party retailer customers, Aldi in the UK and The Reject Shop in Australia, have been at a “solid level”. 

Card Factory chief executive Karen Hubbard said: “Our board and management team have reacted rapidly to the very dynamic situation and I am confident that we will exit this crisis with an operating model and customer proposition that will make Card Factory the customers’ first choice for greeting cards, everywhere and for all occasions, however the customer wishes to shop, although given the uncertainty we are unable to provide guidance on future performance.” Further details will be unveiled at a capital markets day on July 28. 

Full-year update

The update came as Card Factory reported turnover of  £451.5m in the year to January 31.  That’s 3.6% up on the previous year. Almost half (45.8%) of sales were from non-card products.  But pre-tax profits of £65.2m were 4.4% down on last time. 

Card Factory, a Top350 retailer in RXUK Top500 research, said that during the year it had a 33% share of its market, although a 0.5% decline in like-for-like sales reflected weak consumer confidence and a general decline in high street footfall. Valentine’s and Mother’s Day sales were at record highs for the third year in a row. Sales via retail partners came to £3.1m, up from £0.1m a year earlier. 

Online sales rose by 14.8% during the full year – having grown by 56.3% during the previous year.  Card Factory said this was partly affected by the delay in launching its new ecommerce platform during the year. Sales at gettingpersonal.co.uk were “disappointing” against the cost of customer acquisition and competitor discounting. 

During the year the retailer opened 50 new stores, net of closures, taking it to a total of 1,009, up from 965 a year earlier.

Image: screenshot of cardfactory.co.uk

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