14 Jan 2021
Posted in Retail
Card Factory’s suffers amid store closures as it struggles compete with online pureplays, says GlobalData
Following today’s release of Card Factory figures for YTD FY2020/21;
Zoe Mills, Senior Retail Analyst at GlobalData, a leading data and analytics company, comments:
“Despite the festive period offering a glimmer of hope with like-for-like sales between 1 October and 3 November 2020 up 17.7%, Card Factory’s YTD results remain poor, with its reliance on stores and small online business proving detrimental amid the COVID-19 pandemic. Its festive trading does however highlight its destination appeal for Christmas greetings cards but its inability to transfer this demand online during store closures remains a problem. While total sales fell 33.7% to £281.4m in the 11 month period reported, this performance is an improvement on H1 2020/21 for the six months up to 31 July 2020, which had a comparative decline of 48.6%, highlighting that Card Factory has been able to claw back some of the sales it lost during the more significant period of store closures between March and June 2020. This has also been reflected in profit before tax, with Card Factory estimating a full-year loss of £10m (compared to the £22.2m loss reported in H1).
“Despite an improvement online, the threat of Moonpig and Funkypigeon remains clear, with these online pureplays significantly more front of mind among online greetings card shoppers and Card Factory unable to disrupt the online card market just as it did in physical retailing. Card Factory relaunched Cardfactory.co.uk in 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 will bolster its online proposition, benefitting from a shared cost base, but it is arguably too little too late to be competitive with the online greetings card specialists.
“With non-essential stores shut throughout the UK, Card Factory has entered the new year in a tough position. Having been unable to open stores on 37% of trading days in FY2020/21 due to enforced closures, its performance in its next financial year hinges on stores being able to remain open for a prolonged period. The greetings card specialist must maintain its focus on its online proposition and invest in marketing to boost awareness of both online fascias and showcase the improved look and functionality of its websites.”