New Card Factory website nears launch as annual profit slides

Card Factory is preparing to enhance its online operations and improve its multichannel proposition, with the launch of its new website, which has been delayed until the end of July.

Reporting financial results for the 12 months to the end of January 2020, which showed like-for-like sales had dropped by 0.5% and pre-tax profit was down by 4.4% to £65.2 million, the UK retailer said it was preparing for more digital demand. The business is also continuing to develop a more integrated supply chain to increase self-sufficiency.

Revenue for the period was £451.5 million, down by 3.6% year on year, but online trading has been positive – especially earlier in the reported period. sales increased by 14.8% year-on-year, although “disappointing” sales have led to rethink in how that division is run. After failing to break even, it will be integrated into the new Card Factory platform in the second half of the financial year.

Since the coronavirus took hold in the UK, which temporarily closed all Card Factory stores and resulted in the furloughing of more than 90% of staff, online trading from the retailer’s two websites has been strong.

Its eponymous site has seen sales rise by 302% on a like-for-like basis compared to last year, and they are up by 153% in the year to date (YTD). Getting Personal has reported a 68% increase in sales since lockdown on 23 March, while YTD sales are up by 27%.

In response to this increased demand and to support recommended social distancing measures for workers, Card Factory has established a second fulfilment unit in its Wakefield facility to serve online customers.

Indeed, the supply chain has been an ongoing focus area for Card Factory over the last 18 months, with the business aiming to reduce its reliance on overseas production and create more items in house. This integrated supply chain is viewed as a way of managing costs in the coming years.

The retailer said it continues to use electronic point of sale data to inform future designs and ranges, and to automate replenishment in stores and ensure bestsellers are well stocked in shops. It has also completed the merger of its online and retail customer service teams to reduce silos in the organisation.

Card Factory said the most recent Valentine's Day and Mother's Day resulted in record sales for the business for the third consecutive year, but it bemoaned a weaker Christmas period, citing the macro environment and its own poor execution.

A net 50 new stores opened in the last financial year, but the retailer warned this year’s new shop roll-out will be slowed due to the coronavirus. It also said it is well prepared for peak period 2020 after analysing store data related to its weaker than expected Christmas 2019 performance.