Following today’s release of Card Factory’s figures for the six months ending 31st July 2023; Tash Van Boxel, retail analyst at GlobalData, a leading data and analytics company, offers her view: “Bolstered by a robust performance across everyday gifting as well as key occasions, such as Valentine’s Day, in the six months to 31 July 2023, group revenue at Card Factory has risen 11.5% to £220.8m. While profits were up 72.7% to £24.7m, this is largely a recovery back to levels seen in H1 FY2019/20, though this is a positive nonetheless. This strong performance was driven by its offline channel, with total store like-for-like (l-f-l) sales up 10.5%, as consumers continued to revert to shopping on the high street for greeting cards and gifts. Indeed, despite its strong performance instore, its online arm reported year-on-year declines, falling 13.1% on a l-f-l basis on FY2022/23. The positive uptake of its click & collect service is promising for Card Factory; however, it will struggle to compete with online players such as Moonpig if it relies solely on the sales of greeting cards online. Indeed, Card Factory must play to its strengths as a celebration destination, promoting higher ticket items online, such as helium balloons, while tempting consumers with add-on purchases instore from those opting to click & collect their orders.
“Card Factory’s gifts and celebration essentials have been the strongest performers across its categories, with l-f-l growth up 13.1%. This is likely the result of robust trading during occasions such as Mother’s Day and Easter, with GlobalData’s consumer surveys indicating that Card Factory was ranked in the top 10 across cards & gifting categories for both occasions in 2023. Card Factory must continue to highlight its everyday gifting ranges, as this will help to protect revenue in H2, given the fall in demand for Christmas cards and gift wrap we saw in 2022. Rival Clintons has been struggling in recent months, and Card Factory has an opportunity to grow market share this year, and it will be important for Card Factory to highlight its value ranges that set it apart from its mid-market competitors through increased marketing in the golden quarter.
“Card Factory’s expansion plans continue, with 11 net new stores in H1 FY2023/24, as well as a new long-term partnership with Matalan in the UK, in addition to the introduction of franchises across the Middle East. As the greeting cards & gift specialist continues to grow its presence domestically in the UK, as well as internationally, it will be important to ensure expansion is taking place at a manageable rate. However, Card Factory must not lose focus on improving its existing store estate, as this will be key in maintaining momentum given that pre-pandemic store l-f-ls were stagnant. Continued investment in its stores, in terms of layout and ranges, will help Card Factory to ensure the longevity of its stores and support growth prospect when there is more limited opportunities to expand its store estate further.”
