Topps buoyed by a resilient June performance

Following today’s release of Topps Tiles Q3 figures for 2019/20,

Matt Walton, Senior Retail Analyst at GlobalData, a leading data and analytics company, comments:

‘‘While Topps’ average weekly sales in Q3 were less than half of last year, it will be encouraged by the strong recovery throughout the quarter with sales for the final week of June being only 5.4% down on the prior year. This is a resilient performance given its offer is more weighted towards conducting larger redecorating projects, which have been severely impacted by weakened consumer confidence ahead of a very deep recession. It also indicates that Topps has had a more consistent recovery rather than an initial spike on store reopenings, making it well placed to continue this momentum into its Q4.

This better than anticipated set of results is reflected in its share price, which rose by 8.1% in early trading, with the retailer giving positive guidance on its cash and trading performance. Topps’ larger stores and more limited footfall mean it will be less impacted by social distancing and a recovery in trade and commercial will further support performance. Topps is in a more stable cash position with £52.9m available putting it at less risk of falling into administration.

Striking a balance between price and design will be key to Topps maintaining this recent performance. During its H1, Topps focused more on pricing and extending its value range to stimulate demand, which would have continued into Q3 but this must not be at the expense of its prior focus on design which helped separate themselves from the DIY sheds. Emphasising its online design tool, Lifestile, to capitalise on its greater website traffic, with sales up 139% in Q3, is now more critical to attract shoppers during pre-purchase research. This will also help drive shoppers into stores where its consultation areas and focus on design can help trade customers up.”

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