Card Factory has sent out a positive message to the media, investors and the City that it has accessed additional funding and pulled right back on unnecessary expenditure to put it in a strong position to ride out the effects of Covid-19 on the retail business.
An ‘operational and financial update in response to Covid-19’ issued yesterday (May 6) by Card Factory’s ceo Karen Hubbard detailed that the company has received confirmation from the Bank of England that it has been successful in securing a Covid Corporate Financing loan (CCFF). This is in addition to the £200 million revolving facility it already has in place with its banks.
While all of Card Factory’s 1,000 shops remain closed, sales via its online platforms are well up. Albeit from a low base, Karen has revealed that sales from Card Factory.com are up 267% since lockdown and its more mature personalised gifting site, Gettingpersonal.com is up 57.5%.
Contrary to its historic practice of opening 50 shops a year, the Wakefield-based retailer has scaled this right back, saying it will only be opening the seven stores it is legally committed to in this coming year.
As part of cost saving measures, the company has negotiated rental payments and is having ongoing discussions with landlords to reduce rents.
Karen assured that having taken prudent measures she and the board remain ”confident that the group has access to sufficient liquidity, even in the event of a prolonged store closure period.”
Despite the fact that Card Factory has announced it will not be paying out a final dividend to shareholders, analysts at brokers Investec are still flagging the shares up as being a good buy. A recent announcement from the broker reads: “All stores remain shut, though it is encouraging that Card Factory has seen a strong response online. Online usually accounts for low-single-digit percentage of sales. Its business model is not broken, nor is the company in financial distress.”
Top: All of Card Factory’s 1,000 UK stores are closed though it still have distribution in half of Aldi’s stores in the UK as well as in The Reject Shop chain in Australia.
