Topps Tiles has reported a record-breaking year – despite stores being closed to the public and only open to trade customers for three months of it. While shops were shut, online sales also broke records.
The retailer, ranked Top50 in RXUK Top500 research, now aims to take one in five pounds spent in the tile market by 2025. Supply chains proved challenging during the year, while Topps cut store numbers by 29 as it looked to right size its network.
Group revenue of £228m in the 53 weeks to October 2 was 18.3% higher than a year ago. Retail sales of £219.4m over 53 weeks, and £215.3m over 52 weeks, were up from £185.3m a year earlier. Like-for-like retail sales were 19.6% up on the previous year – 2% higher in the first half and 39.8% higher in the second half – after this year’s lockdown ended and a year on from a previous lockdown. Pre-tax profits came in at £14.3m, up from a loss of £9.8m a year earlier, having rebounded in the second half of the year.
The retailer now aims to be carbon balanced by 2030.
Topps Tiles chief executive Rob Parker says: “Our full year results demonstrate the strength of our position as the UK’s leading tile specialist and the potential of the business when it has been able to trade without restriction. Despite significant disruption for a three-month period, during which our stores were unable to welcome homeowners we delivered record revenues for the year and made good progress towards our ‘one in five by 2025’ market share goal.
“We believe this performance underlines the strength of our strategy and the success of new initiatives including the expansion of our value rages and the introduction of innovative new products. The successful development of our digital offer during the year has been particularly pleasing and we have plans in place to expand this further in 2022.”
In the opening weeks of the current financial year, like-for-like sales have been 18.4% ahead of the same time two years ago. Parker says: “While trading headwinds are likely to continue over the short term, we are confident in our strategy and our ability to deliver sustainable long-term growth.”
Supply chains and skills shortages
Topps Tiles says its last financial year was “extremely testing” for all supply chains, and one in which it has relied on its existing supplier relationships and on its logistics teams “more than ever”. It says that about 70% of its purchases during the year came from its strategic supplier base – down from 80% a year earlier, as it change its sourcing due to supply chain disruption. But despite this it has maintained continuity of supply and at year end had £32.8m in inventory in its stores and central warehouse, £3.4m more than last year.
The retailer says that it has relied more than it would like on more expensive contract drivers at a time when HGV and other drivers have been in short supply. Recruitment and retention of staff remains a top priority, says Topps Tiles.
Topps Tiles says that almost all of its customers visit both stores and its website at some point during a purchase. About 30% of online sales are collected from a store.
In the second quarter of its latest financial year, only registered traders could visit its stores as a result of the third UK Covid-19 lockdown. That meant all other customers had to research and buy online and its website had 12.3m visits in the year – 31% up compared to its 2019 financial year – with record weekly performances on revenue, orders, website traffic and conversion while its supply chain shifted to single picks for direct delivery and away from store replenishment mode. Second quarter online sales grew by 135% on the same time a year earlier. Facebook and Instagram impressions rose (+184%) while its Pinterest audience grew by a third to 900,000 people. Social media is now a key strategic focus.
It has also looked again at its store network, closing a net 29 shops to finish the year with 313, down from 342 a year earlier. In the medium-term it aims to trade from about 300 shops, down from a peak of 372 in 2017.