Card Factory (Overview)
Card Factory is one of the UK’s largest specialist greetings card retailers. It trades through more than 1,000 outlets throughout the UK and is pitched at the value end of the market.
Its first move online came through the acquisition of the personalised card and gift website Gettingpersonal.co.uk in 2011, but the core Card Factory site is now transactional as well and the digital proposition was further improved from late 2020 with the launch of a new Card Factory app.
The retailer is transitioning both its online sites onto a single unified platform in 2022 to unlock cost benefits and provide the ability to significantly expand the cardfactory.co.uk gifting range.
The retailer had been expanding at a rate of some 50 stores a year until recently, but expansion has slowed sharply since the pandemic when some planned new store openings were postponed and attention turned instead to savvy relocations.
As well as increasing online sales, Card Factory has also been looking to partnerships with value-led retailers such as Aldi and Matalan in the UK and The Reject Shop in Australia to expand coverage and make its products more readily available for impulse purchasing.
Card Factory’s vertically integrated business model, which includes an in-house design team and print works, had ensured high profit margins, but these have come under pressure in the past few years as the retailer battled currency headwinds and increased investment in infrastructure to support the rapid expansion programme.
Having slumped into the red during the difficult 2020 financial year, the retailer swung back into the black in the year to end-January 2022 (FY2021), posting a pre-tax profit of £11.1m. At 3.0%, however, pre-tax profit margins remained well below Card Factory’s double-digit pre-pandemic margins. Total sales rose 27.8% to £364.4m, driven by “a steady recovery in store performance following the easing of lockdown restrictions”, but also remained well down on pre-pandemic levels.
Founded by entrepreneurs Dean and Janet Hoyle in 1997, Card Factory has grown quickly and gone through various stages of ownership. It went public following a successful IPO at the end of 2014.
Innovation rating: 2