Stalwart of company aims to take a break from the game
The Wakefield-based firm said like-for-like store sales jumped 2.8 per cent in the 11 months to December 31, boosted by strong growth in non-card areas such as gifts and personalised products.
Its online business also performed well, reporting double digit revenue growth in the second half.
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Hide AdThe group is cashing in on the backlash against overpriced greetings cards and most of its cards sell for under £1 with some priced at less than 50p. This is at a time when the likes of WH Smith have been criticised for selling cards at £3 and £4.
Card Factory benefits from in-house design, printing and warehousing, which significantly reduces external costs and keeps the price down. It designs and manufactures cards in Yorkshire and also uses third party providers.
The company is also seeing strong sales of new non-card ranges, such as gift boxes, dressings, candles, cushions, picture frames and ornaments.
The firm reported total sales growth of 8.1 per cent following the opening of 50 new stores, bringing the total estate to 814 stores.
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Hide AdIt said it has a strong pipeline of new store opportunities and is confident it can open around 50 stores a year.
Its principal online business, Getting Personal delivered double digit revenue growth in the second half. As expected, this was at a lower level than the 25 per cent revenue growth achieved in the first half given the much tougher comparative in the second half of last year when turnover increased by 27 per cent. Richard Hayes, Card Factory’s outgoing CEO, said the trial of the relaunched Card Factory transactional website is going well.
“We are really pleased with the progress at the Card Factory website.
“Card Factory has enjoyed positive like-for-likes every year. It does well when the economy is doing well and when it’s not doing so well.
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Hide Ad“If we can continue to improve the quality of the offering and sell at our price points - that’s what the customer wants.”
He said the group is on course to deliver sales growth at a similar level to last year.
Earlier this month Card Factory announced the appointment of respected, former Asda director Karen Hubbard as CEO following Mr Hayes’ decision to retire at the end of June.
Ms Hubbard is chief operating officer of discount retailer B&M and from 2009 to 2014 she held a number of senior roles at Asda including executive director property, format development & multi-channel. She previously spent 14 years in BP’s retail operations.
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Hide AdShe will join Card Factory as CEO designate on February 22 and will succeed Mr Hayes as CEO in mid‐April.
Mr Hayes welcomed Ms Hubbard’s appointment.
“We are really pleased Karen is coming on board. She’s a retail expert and has very relevant value retail experience. It means we’ve got someone who understands us.”
Analyst Jonathan Pritchard at Peel Hunt said: ”Card Factory’s Christmas trading has been extremely robust and is testament to the resilience and defensiveness of the business. Like-for-like sales growth remains the best part of three per cent, a strong showing in the fourth quarter given that footfall on the high street has been weak, and in the meantime management believes that it has improved its relative pricing/quality position against the rest of the market.
“We see no reason to believe that the like-for-like sales momentum will wane. There are some cost pressures ahead but management has hurdled similar in the past.”
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Hide AdRichard Hayes has been with Card Factory since 2003, serving as managing director and CEO since 2008.
He will retire from the board and leave the group at the end of June following a four month handover period.
Mr Hayes, 50, is not expected to take up another position elsewhere. He made £14m on shares sold at the IPO in 2014 and he sold a further £9.6m of shares last June.
He also has a 3.4 per cent stake in Card Factory, which is worth around £42m.
“I’ve worked full on for 13 years,” he said.
“I’m looking forward to doing some of the things I never got round to - spending time with family and playing a bit of golf. I’ll give myself a break and the plan is no further forward than that.”