Card Factory warns of full year loss
Card Factory has warned that it could report a pre-tax loss of around £10 million in its full year results due to extended periods of store closures during the Covid-19 crisis.
In a trading update covering the 11 months to 31 December, the retailer revealed that store sales declined by 38.1% where mandatory store closures prohibited openings for 37% of available trading days.
In contrast, its online business continued to perform well with sales at cardfactory.co.uk up 137% on a like-for-like basis in the period.
Whilst Card Factory’s short term cash requirement will be covered within its existing £200 million bank facility, it now expects its current covenants to be breached at the end of the month, although it is continuing to have constructive discussions with its banking syndicat.
Card Factory executive chairman Paul Moody said: “We have successfully pursued key strategic aims, including the acceleration of our digital capability, a streamlined and more effective “newness” range cycle, the implementation of a pricing architecture enabling material retail price progression, auto-replenishment and stock management in store, utilising hand-held technology and bringing ESG to the fore in our decision making.
“I remain convinced that the Card Factory brand, and quality with value proposition, resonates strongly with customers. Despite the obvious uncertainties in the first half of 2021, I am confident that we have the opportunity to return the business to sustainable profitable growth and will do all that is necessary in the near term to ensure that we can maximise that opportunity.”
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