Card Factory’s full-year results may be slightly underwhelming compared with its high standards of recent years, but it is still comfortably outperforming principal rival Clintons.

Card Factory’s like-for-like sales growth slowed to 0.4% last year, down from the 2.8% jump in the previous year, but encouragingly trading started to improve again from the second half.

Clintons meanwhile has yet to reveal any like-for-like figures for the financial year to January 2017, but has lagged behind Card Factory over its last three financial years.

While like-for-likes did return to positive territory in 2015/16, the 1.2% uplift was a fairly low figure, given that 70% of the Clintons store network had been modernised to a new ‘tomorrow’ format and the comparatives would have been weak.

Static sales at Clintons

Card Factory and Clintons have essentially traded market positions over the past five years.

Ahead of its collapse, Clinton Cards – as it was previously known – generated broadly twice the level of sales as Card Factory.

The reverse is now true, with Card Factory having achieved solid sales growth over the past five years. Clintons’ presence was much reduced after its rescue and its sales have remained static since.

While Clintons claims it is a “core to premium” brand, in practice it operates in a very similar segment as Card Factory, but with higher price points.

Even Clintons’ new store format has not allowed it to differentiate itself sufficiently from its budget rival.

Card Factory’s market-leading margins

Where Card Factory has really put some distance between itself and Clintons is its level of profitability.

Profits might have dipped at Card Factory last year on a statutory basis, but its margins remained above the 20% mark.

There are few other businesses across the wider retail sector that can boast such a high level of profitability, but Card Factory does benefit from a vertically integrated model, producing its own cards.

By contrast, Clintons has remained loss-making over its last three financial years and there is much less scope to achieve such market-leading margins.

It may now be owned by a major supplier of greeting cards, but American Greetings is unwilling to pass on any special deals to Clintons, due to the risk of upsetting its relations with other UK customers, such as the major supermarkets.

Sales densities

Surprisingly, Card Factory’s sales densities are not that much higher than Clintons’.

Given its outperformance over the past few years, the business would have perhaps been expected to be ahead by a larger degree.

However, sales per square foot at Card Factory have been held back by the considerable immaturity of much of the store portfolio, given its rapid build-up in recent years. This is expected to remain a factor over the coming years.

Clintons’ most recent figure of £270 per sq ft compares favourably to the £245 per sq ft achieved prior to its collapse.

However, it could potentially get its stores to work harder if it does decide on a full roll-out of specialist party shop-in-shops – a move revealed by Retail Week.

Clintons vice-president of marketing and ecommerce discusses the future of Clintons