Topps Tiles said that its strategy of inspiring its customers both online and in-store was continuing to be effective, as it today reported flat half-year sales and falling profits. The retailer said most customer journeys start on its website, while the size of its store portfolio “is a key source of competitive advantage”.
Topps Tiles reported group revenue of £110.3m in the six months to March 30 2019. That’s down by 0.2% on the same time last year. Pre-tax profits of £5.2m were down by 18.8% on last time, after a number of property-related costs and a trading loss at its commercial tiles business, Parkside.
Chief executive Matthew Williams said the group, a Top100 retailer in IRUK Top500 research, had put in a resilient first-half performance to consolidate its position as the UK’s leading tile specialist, and had made an “encouraging start” in the second half of its financial year. “Against a consumer backdrop which remains challenging, our trading performance was robust, underpinned by further gains in market share,” he said. “Our commercial tile business continues to grow rapidly, with first half sales more than tripling year-on-year.”
He added: “While we are retaining a prudent view of market conditions for the remainder of the year, we remain confident in our ability to continue to extend our market leading position.”
Most customers, said Topps, start their shopping journey on its website as they research potential products, and it continues to invest in its digital capabilities accordingly. The retailer said that it continued to invest in its digital capabilities. “The integration between all channels continues,” it said in its half-year statement, “with growing confidence in the direct linkage between online traffic and store footfall. Social media is increasingly important, both for the research phase of a project and also the sharing of the completed project, and we regularly receive 1.2m views per month on Pinterest.” It is also working with social media influencers who, it says, have a combined reach of about 3.3 million people.
The retailer had 361 stores by the end of the first half, having closed a net seven stores over the half-year and, says Topps, this is a “key source of competitive advantage” for it since it makes “us very convenient for the majority of the UK population”. It says it will actively manage and optimise its store portfolio in order to reflect changing customer needs. The time to the next lease break opportunity is 3.9 years, down from 4.3 years in 2018 giving a flexibility that it describes as a strength of the business. However, property-related costs of £1.8m were part of the reason that profits were down on the same time last year.
Topps Tiles now has 99,000 traders registered on its trade loyalty scheme – up from 70,000 in 2018 – and it has also launched a trade credit scheme.
Image: Screenshot from Topps Tiles website/InternetRetailing Media