Card Factory in a strong position as enters golden quarter, says GlobalData


Following today’s release of Card Factory YTD figures for FY2019/20, Zoe Mills, retail analyst at GlobalData, a leading data and analytics company, comments: ‘‘Card Factory is heading into the Christmas period in an enviable position, with growth in its YTD group sales accelerating against strong comparatives, while its competitors face declining high street sales and store closures. Yet its existing store estate continues to plague its like-for-like performance with its Q3 2019/20 l-f-ls declining by 0.3%, hindered by declining footfall.

“Given Card Factory’s outperformance in seasonal categories, the greetings card specialist must focus on its existing store portfolio to ensure that it can continue to steal market share from mid-market players such as Clintons and WH Smith.

“Much of Card Factory’s success continues to come from its rapid store expansion, both in the UK and Ireland as well as through a partnership with Aldi that will see it supply half of the discount grocer’s stores (440 locations) by the end of November. In Q3 2019/20, the greetings card specialist opened 12 net new stores, including four in the Republic of Ireland, its first significant expansion in this region since the beginning of 2018. This brings Card Factory’s store estate to 999 stores in the UK with 11 in Ireland. The rapid expansion of its portfolio ensures that Card Factory remains an anomaly in the market, especially given its competitor, Clintons’, recent woes that has seen it announce its intentions for a CVA.

“While Card Factory states that it is on track to open approximately 50 net new stores – it is currently at 38 – by the end of this financial year and that there is a solid pipeline for further expansion in the next year, it must consider winding down its plans given the weak like-for-like performance in its existing store estate. It should instead focus on the market in the Republic of Ireland where its presence is considerably smaller and through its Aldi partnership.

“ relaunched in Q3 2019/20, and while it is yet to be seen if this ailing fascia can be revived, the new look of the website is more premium and distinct from Card Factory’s value focus on its website. If the relaunch is going to be a success, Card Factory must focus on increasing awareness of the brand through marketing, which is essential to aid the group’s performance in the run up to Christmas as retailers vie for the top spot.”