Card Factory profits soar 56 per cent as rival Clintons struggles
The greetings card retailer Card Factory showed its struggling rival Clinton Cards a clean pair of heels by growing its profits by more than half to £56m.
Card Factory's performance shows why the private equity investor Charterhouse Capital Partners acquired the Wakefield-based chain in a deal worth £350m in April last year. The transaction netted the founding Hoyle family a huge windfall.
The contrasting fortunes between Card Factory, which has 596 shops across the UK, and Clinton Cards will be laid bare today, when Clintons is expected to post a sharp fall in its full-year profits.
Card Factory, established by Dean and Janet Hoyle in 1997, delivered a 56 per cent surge in pre-tax profits to £55.7m in the year ending 31 January 2011. Its sales rose by 9 per cent to £228.8m over the period, boosted by new store openings, despite a declining UK market for greetings cards as shoppers increasingly choose to send e-cards or none at all.
Card Factory designs, sources and prints its own cards, which enables it to make tidy margins. By producing its own ranges, it is able to offer cheap prices, such as its current promotion of seven cards for £1.
Clintons, which has more than 700 shops, does not have this level of control over its pricing because it largely relies on suppliers such as Hallmark for its card supplies. Clintons is forecast to post a profit of just £2.5m for the year to 1 August, according to its broker Numis – a sharp drop on £13.9m in the previous year.
Today's results will be the first for Darcy Willson-Rymer, the former UK managing director of Starbucks, who took the helm as chief executive of Clintons earlier this month.
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