The UK’s largest specialist card retailer, Card Factory saw its sales soar by 6% (up to £422.1 million), like-for-like sales increase by 2.9%, but its pre-tax profits were down by 11.9%, citing the increased costs of national living wage and foreign currency exchange as the main reasons for the decline.
Summing up the retailer’s performance for the 12 months to 31 December 2017, Karen Hubbard, ceo of Card Factory said: “We delivered strong like-for-like sales growth in a tough trading environment. We sold more cards than the prior year, and delivered a higher average card selling price and total basket size.”
Confronting the drop in profits, Karen said, “We faced strong headwinds of £14.6m in the year, principally due to the combined impact of foreign exchange and national living wage. Our cost saving initiatives during the year provided substantial mitigation and we have laid the foundations for further efficiencies to be delivered in the future.”
She also revealed that the retailer had “a record breaking number of customers shopping with Card Factory for both card and complementary non-card products, demonstrating our resilience against a backdrop of High Street footfall decline.”
Now trading from 900 stores, it opened 50 new stores in the last year and sees no reason and intends to open another 50 in the coming year taking it closer to its goal of 1,200 stores.
Sending out positive news about the greeting card industry as a whole, Karen Hubbard included latest research findings from OC&C in her chief executive’s report, which highlighted that “the market for single greeting cards is well established, robust and resilient; it continues to show modest growth in value terms, despite a slight decline in volume as expected.”
Reassuringly, the research findings show “an increase in the number of cards purchased by 18-34 year olds.” Although Karen says this trend will need to be monitored over a longer time period, she points out “it is an encouraging trend for the ongoing sustainability of the market.”
The data also confirmed that “there continues to be no meaningful shift to digital greeting cards, with fewer customers than ever suggesting that they are replacing a physical card with a digital greeting,” says Karen.
Two months into its new financial year, Karen revealed that she is “particularly pleased with the record seasonal performances from Valentine’s Day, Mother’s Day and Easter.”