Card Factory’s shuttered stores drag down overall performance

Following today’s release of Card Factory H1 figures for 2020/21, Zoe Mills, Senior Retail Analyst at GlobalData, a leading data and analytics company, comments:

“Card Factory has announced a dismal set of results, hampered by its reliance on its store network and closures due to lockdown measures in the UK and Ireland. While Card Factory states that this performance is in line with expectations and it did take a more tentative approach to store re-openings – its store estate was not fully reopened until 24 July 2020. Nevertheless, with its store estate now fully open, store performance remains challenging, with store like-for-likes down 6.9% for the four weeks ending 20 September 2020, due to lower footfall. These disappointing results mean it is in a much less enviable position that it was last year as it entered the run up to Christmas, as the shift to online spending ensures the likes of online pureplays Moonpig and Funkypigeon are most likely to reap the benefits from this channel shift.

“Card Factory’s reliance on seasonal occasions also hindered its performance, with Father’s Day, Easter and Mother’s Day all falling just prior to lockdown or during lockdown measures in the UK. GlobalData’s UK Father’s Day report, which noted a higher percentage of shoppers purchasing Father’s Day cards in 2020, highlighted a significant fall in shoppers’ using Card Factory for purchases of greetings cards (down 24.2ppts versus 2019 to 6.9%). Nevertheless, Card Factory did see some success in instore formats as its partnerships with Aldi (in the UK) and The Reject Shop (in Australia) continue to prove a success with partnership sales up from £0.5m in H1 FY2019/20 to £1.9m in the current financial year. Its expansion into these locations has been key with Aldi remaining open during the entire COVID-19 pandemic as well as witnessing increased footfall to its stores. It has also resumed its 15-store Matalan trial following a lift in lockdown restrictions ensuring it is able to tap into more locations where it has a weaker physical presence.

“Online penetration has seen a significant improvement in H1 2020/21, up 9.1ppts to 13.2%, with online sales increasing by 64.2% to £13.3m. While likely to be a temporary boost driven by store closures, Card Factory must keep up this momentum, investing to ensure a stronger overall proposition in the future and remain competitive against online greetings card specialists, Moonpig and Funkypigeon. Card Factory launched a new website for Cardfactory.co.uk on 2 July 2020, complementing the updated Gettingpersonal website that launched in Q3 2019/20. With the greetings card specialist migrating both fascias onto the same platform, this can only strengthen its online proposition with both benefitting from a shared cost base.”

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