Shoppers are continuing to buy online post-Covid lockdowns, but footfall in-store remains low. Image: Screenshot of card factory.co.uk
Card Factory says it wants to become the first retailer in its category to provide “seamless physical and online shopping,” as it moves to an omnichannel model and targets sales of more than £600m by its 2026 financial year.
By that date, the card and gift retailer, ranked Top500 in RXUK Top500 research, expects around 20% of sales to come from online and multichannel sales and from retail partnerships. It also expects to sell more gifts alongside its core card selling business, and to focus on the customer.
Card Factory today reported revenue of £116.9m in the six months to July 31. That’s 16.3% up on the £100.5m it reported at the same time last year. Sales fell by 3.7% on a like-for-like basis that strips out the effect of store openings and closures. Online sales fell by 10.3% to £11.9m compared to the same period last year – but remained 50.2% ahead of the same period in the 2020 financial year – pre-Covid 19. Sales at gettingpersonal.co.uk fell by 20.7% to £6.2m, offset by a 4.8% increase in revenue from cardfactory.co.uk to £5.7m. High street footfall for the period from April 2021 – once stores reopened – was 27.4% lower than the same period in its 2020 financial year.
Pre-tax losses narrowed by 70.7% to £6.5m from £22.2m a year earlier. The retailer completed a £225m refinancing during the half-year.
Since the end of the half year, Card Factory says ecommerce sales have met expectations while in-store footfall and sales continue to recover. That said, they are still 21.9% below pre-pandemic levels – although average basket sizes are higher than pre-pandemic. LFL trading for the seven weeks to September 19 is down by 3.6% on the same time last year and down by 6.3% on the same period two years ago.
Darcy Willson-Rymer, chief executive of Card Factory, says she has reviewed the business and its growth strategy since joining the business in March 2021.
"The delivery of the growth strategy set out in July 2020 – and the broader retail environment itself – has obviously been impacted by Covid-19,” she says. “However, it is clear that the right way forward is to transition Card Factory from being a store-led card retailer into a market leading, omnichannel retailer of cards and gifts. Whilst cards will remain the largest part of our business in terms of total contribution, we will substantially increase our focus on the complementary gifting and party markets, enhancing our customer offer and significantly increasing the size of our addressable market. The successful delivery of our strategy will be achieved by putting the customer at the heart of everything we do - ensuring that we provide outstanding value and quality across all our products and services, available however our customers want to shop.
"Although there remains some uncertainty about the speed of the post-pandemic market recovery in the short term, I firmly believe in both the resilience of the card and gifting markets and the fact that the majority of customer spend will remain in stores for the years to come."
Multichannel strategy
Card Factory aims to be the first card and gifting retailer to provide “a seamless physical and online shopper experience,” with access to cards, gifts and personalised products at “anytime, anywhere” through a combinations of stores, website, apps, click and collect and home delivery services. The retailer plans to increase its online market share at the same time as increasing store sales.
In order to achieve that it will invest in mobile apps, in machine learning recommendations, personalisation, notifications and live chat, and in selling an extended product range online. The retailer plans to add shipping options to both home and store while increasing fulfilment capacity, speed and accuracy.
A net 100 new shops will be opened by its 2026 financial year in areas where Card Factory is currently less present, including London and the Republic of Ireland. Locations will include retail parks and other areas of high footfall, while shops will be assessed on measures including profitability. Card Factory had 1,019 shops by the end of the half year.
Card Factory aims to reach more UK shoppers through partnerships, including international partnerships in new markets.
Operations and logistics
Card Factory says that it has started recruiting early for seasonal Christmas staff, and has also put contingency planning in place to “maximise sales when stock gaps inevitably occur due to the reported supply chain capacity issues, and potential driver and worker shortfalls”.
via https://AiUpNow.com September 28, 2021 at 06:01AM by Chloe Rigby, Khareem Sudlow,
