Card Factory has avoided its worst case scenario of a staggering drop in store sales since the end of lockdown, it said today, as digital sales soared 120 per cent during the quarantine period.
The greetings card retailer said today that store sales have plunged 21.6 per cent year on year since mid-June, better than its own worst fears of a 50 per cent drop in the first month of reopening.
The digital sales surge and better than hoped for store sales pushed the company’s share price up 6.5 per cent in morning trading to 44.5p.
Card Factory has now reopened all but three of its 1,018 stores around the UK, having ended lockdown by reopening 89 in England on 15 June.
While footfall has weakened since reopening, the average spend has shot up by 25 per cent.
And Card Factory saw online sales surge after lockdown started in England on 23 March.
Like-for-like online sales rocketed 69 per cent for the financial year to 19 July. During lockdown, digital sales exploded 120.7 per cent on a like-for-like basis.
Since mid-June, when Card Factory stores began reopening, online like-for-like sales were still up 60.5 per cent.
The company still warned first-half revenue is set to halve to £100m compared to last year’s £195.6m as a result from lockdown. It blamed big sales-driving events falling inside the lockdown period, such as Easter and Father’s Day.
“The board is pleased with the trading performance since stores have reopened,” Card Factory, which has scrapped its dividend over coronavirus, said.
“However, it is far too soon to determine whether initial trading reflects the release of pent-up demand following lockdown or the point at which consumer footfall and sales (both transactions and average spend) will settle to a sustainable level.”
But online sales and better than expected store revenue helped bring net debt below its original half-year forecast to £144.2m. So far Card Factory has received £15.5m under the Coronavirus Job Retention Scheme for furloughed staff.
The company’s CEO Karen Hubbard left the firm at the end of June after four years at the helm.
Card Factory said Hubbard and the board agreed it was an “appropriate” time for a leadership change to pursue a “refreshed” strategy.