Topps Tiles says customers bought online and in-store as they focused on home improvements over the summer – and now it’s expecting to turn in a profit this year.
The specialist tile retailer, ranked Top150 in RXUK Top500 research, says that customers have changed the way they buy since lockdown eased. In the last six weeks, like-for-like retail sales grew by 15.5% year-on-year as with DIY sales rising sharply and trade business recovering steadily. Online sales over the period were no longer at the peaks seen during the height of lockdown in April and May, but they remain higher than they were before.
Overall, average weekly sales in stores and online over the last six weeks have returned to positive territory compared to last year, having fallen sharply in April (-80%) and May (-69%) before recovering slightly in June (-20%). In the first six weeks of the fourth quarter to August 8, sales are up by 13.1% on last year and, says Topps Tiles, the business is now operating as normal with all shops now open and the “vast majority” trading seven days a week. No staff are now furloughed.
The retailer says it now expects to generate a “modest level” of adjusted pre-tax profits for the year to September 26, although it says it is difficult to assess the longer-term outlook.
Commercial sales, meanwhile, are subdued, with activity starting to recover. “Given the long lead times involved in the construction industry, we are not expecting a sudden increase in sales but we believe the group can continue to take market share and we remain committed to our goal of building a market leading commercial business over the medium term,” said Topps Tiles in today’s trading update.
Rob Parker, chief executive of Topps Tiles, said he was pleased with how the business had navigated the crisis to date, and that it was well positioned for whatever comes next, thanks to both staff and loyal customers.
“Our response to the pandemic has strengthened the business,” he said, “and fundamentally improved our liquidity position, providing further flexibility and putting us in a strong position both to benefit from the recovery in our markets and to meet any future challenges.”
The retailer sold and leased back its head office and warehouses in June, and now has £9m net cash and is able to access a further £58m through lending.
Topps Tiles, founded in 1963, sells online and from 351 retail shops across the UK and from four commercial showrooms.