Wednesday, January 23, 2019

Topps Tiles eyes commercial sector following first half profit rise


In contrast to store closures at big DIY players Homebase and B&Q, Topps Tiles is considering targeting the commercial market once it has reached its goal of taking a third of domestic sales across the country, it said in a trading update this morning.

Topps Tiles, Britain’s biggest tile specialist, delivered a pleasing set of results, seeing growth in profit in the first half of its financial year boosted by an increase in revenue.

Driven by new openings and improved stores and ranges, the tiling and flooring retailer has grown its share of the domestic market for six straight years to 30.3% at the end of 2014 and is aiming to take a third in total, possibly this year.

“Topps had an encouraging first half, increasing like-for-like sales by 5.3%. Initiatives to upgrade and rebrand our stores, making the shopping experience even more inspirational, have been well-received by customers,” said CEO Matthew Williams.

“Once we have achieved our goal we could look at the broader tile market.”

Helped by improving housing transactions and a growing ‘do it for me’ trend of customers hiring professional tile fitters for projects, sales at stores open over a year grew 5.3%, with momentum continuing in the first six weeks of its third quarter.

To grow its presence, particularly in London, Topps Tiles is trialling boutique stores that can fit into smaller high street locations and, according to Reuters, will have 12-13 such stores open by the year end and sees potential for 60-70 longer term.

Conlumino Consultant, Greg Bromley, said:

A rise in disposable incomes is beginning to bring some benefits to the wider home improvement market, helping to drive demand from new homeowners amid an increase in housing transaction volumes, as well as from existing homeowners now feeling the confidence to undertake larger scale improvements to the home. However, interest in DIY among the British consumer continues to wane, with a growing tendency for consumers to use tradesmen to complete work. As can be seen from some of the wider struggles at DIY specialists, such as Homebase, retailers operating in this market have had to make fundamental changes in order to remain both relevant and competitive.

In recognising these fundamental shifts in the market, Topps continues to make changes to its business in order to broaden and improve its appeal, as well as to increase authority in the tiling category. An example of this is investment into ranges, and here Topps has introduced over 70 new ranges over the year, with the focus being on introducing on-trend designs. The retailer has also made improvements to its natural stone and small tile ranges.

Topps has also made further changes to its shopping experience. One of the most noticeable improvements has been the refresh of all of its stores, both internally and externally, with more modern branding. Topps has also launched a new online tile visualisation tool enabling customers to view tiles in room settings in the home.