Positive trading statement as retailer opens third central London store
Trading “ahead of expectations” was the good news from Card Factory as the giant greeting card retailer reported strong Christmas trading with customers’ continuing return to the High Street.
The announcement this morning, 10 January, showed sales in the 11 months to 31 December rose to £432.6million, from £337.3m in the same period a year previous, while store revenue grew 7.1% on a like-for-like basis.
And the news comes following Card Factory’s opening of its third store trading in London’s zone one, with the latest shops in High Holborn, joining the existing two in Fenchurch Street and Tottenham Court Road.
Adam Dury, Card Factory’s chief commercial officer, shared his views on the company’s Christmas trading exclusively with PG Buzz, saying he was “pleased” with the outcome, noting that “cards for your nearest and dearest” did especially well, with captions such as wife, husband, mum and dad definitely big hits.
He added: “Overall card performance was in line with my expectations and, personally, I was particularly pleased with the performance of single Christmas cards and the continual focus on our own UK-based production.
“Customer behaviour certainly changed this Christmas as people became more focused on the earlier dates for last postage as well as greater consideration for those cards that could be delivered by hand, thus helping to manage overall cost. From my time out and about in our shops and from listening to our customers it was evident some had chosen to shop the High Streets and shopping centres to reduce the risk of delayed postage from shopping online.
“We ensured we had the right balance of promotional activity and continually reviewed the timings of all product and range launches to ensure we had the right balance between the everyday and Christmas offer. Thankfully we didn’t have to wrestle with the shipping challenges of 2021!
“Customers are searching for value for money and are still focused on celebrating those special times throughout the year. The ability to offer the customer a one-stop-shop of card, gift and wrap continues to remain top of mind as customers look to control spend and shop with greater efficiency. Our proposition offers great value for money across a range of products and price points, and our experience so far this year has confirmed how well this resonates with consumers.”
And for 2023 Adam confided that he is “confident and optimistic – I’m the eternal optimist”, as Card Factory completes its post-season review to ensure it rebalances the upcoming offer to resonate perfectly with the customer.
Today’s trading statement also revealed that Card Factory’s new model store format roll-out is continuing, with 10 stores now open and “generating an uplift to sales compared to comparator stores”, the report added, with further conversions planned for the new financial year, and its Click & Collect trial is now live in 85 stores with “a positive initial reaction to the service”.
The strong Christmas performance has meant Card Factory has lifted its profit guidance, predicting annual earnings for the full year to 31 January, 2023, of “at least £106m” up from the anticipated £96m despite online sales falling by over 27% year-on-year due to the postal strikes.
Card Factory’s ceo Darcy Willson-Rymer said: “We’re pleased and encouraged by the continued strong performance of the business. With delivery of our growth strategy progressing well, it is great to see some of the benefits from this work starting to come through in our financial performance.”
The statement said the increased sales “reflects the continued good momentum within the business alongside the shift of customer spend back towards the High Street”, and added that the strong Christmas trading was driven by improvements in both store transactions and average basket values supported by its “effective range development” and “compelling value for money offer across both cards and gifts”.
Although customers returning to the High Street and the impact of the Royal Mail strikes had reduced online sales, there has been an 85.2% increase over the past three years and the statement said: “Cardfactory.co.uk sales remain up significantly in comparison to pre-pandemic levels.”
A strong performance in both everyday card ranges and complementary categories supported trading with wedding, life moments, milestone and children’s ranges the “best performing” of the everyday card range, all seeing double digit LFL growth.
The report added the performance in complementary categories was driven by the range expansion work completed in the first half of the year, with confectionery, pocket money toys as well as wrap and bags were among the high growth categories.
On the outlook for the coming year, the statement concluded: “While remaining mindful of the challenging economic backdrop, we take confidence in our compelling value for money proposition and the level of ongoing customer demand. The board is encouraged by the strong trading momentum and remains confident in the long-term prospects of the business.”
