The Card Factory is celebrating the opening of its 800th store. New store openings are proving fruitful for the greeting cards specialist which posted an 8% increase in sales this morning.
The retailer’s store expansion program is aggressive, driving the launch of 36 stores in the six months to July and potentially an additional 50 by the end of the current financial year.
The results outline the Card Factory’s position as a dominant player in the card and gift wrap market, and as Conlumnio Analyst Cathy Benson comments, this is “in spite of fears over the declining popularity of physical cards and fierce competition from value retailers, demonstrating Card Factory’s resilient retail model. The retailer’s proposition of value pricing and high quality products continues to resonate with customers, driving like for like sales increases of 2.7%.”
Card Factory is late to the e-commerce game, leaving it to play catch up to competitors such as Moonpig, but its acquisition of the Getting Personal website has allowed it to make inroads into the expanding market for personalised gifts and cards, “challenging the dominance of pureplay specialists.” The company has recognised the tough competition and acknowledged that these high levels of growth will be challenging to maintain in the second half but encouragingly, the re-launch of the Card Factory website in April has created a more accessible platform that will likely contribute to the retailer’s growth in online sales in the future.
“Relatively strong performance for Mother’s Day and Easter in the first quarter saw Card Factory maintain its market leading position while competitors such as WHSmith struggled. Similarly, impressive Father’s Day sales helped to boost revenue in the second quarter. However, competitors are refining their propositions with value players such as 99p Stores’ investing in card design studios and an improving performance by specialist rival Clinton. This could challenge the current precedent for sustained growth at Card Factory,” added Benson.
“Despite this increasingly challenging market, Card Factory continues to prove its resilience to an array of pressures. The retailer has confirmed that its formula of low cost, high quality products and an extensive store network is an effective strategy; however, competition in this market is only set to increase. In light of this, Card Factory will have to work increasingly hard to maintain its market share. Nevertheless, these promising results suggest that the retailer is likely to remain a major player in the future.”