Budget greetings card retailer Card Factory has reported that pre-tax profits were up just 1% in the year to January 31 after a 56 per cent increase the year before.
The company put this down to its absorption of the VAT rise from 17.5% – 20% in January 2011, rather than passing on the extra cost to its consumers.
Chief executive Richard Hayes said Card Factory would have seen a £5 million uplift had it not shouldered the VAT burden, but added that this was “part of a very sound long-term strategy. Other competitors [which might not have done so well] passed the VAT increase on to the customer.”
Card Factory’s meteoric rise over the past few years is widely thought to have contributed to the exponential fall of Clinton Cards’ fortunes.
Turnover at Card Factory increased by 11% to £254.3m and it opened more 80 stores during the same period, bringing its total portfolio to 611. This included its entry into the Northern Irish market, where it has since opened up 20 outlets.
The company also acquired personalised online gifts retailer gettingpersonal.co.uk in July of last year. This business posts separate accounts to Card Factory.
In July of this year Card Factory was named Best Multiple Retailer of Greetings Cards at the annual RETA Awards organised by Max Publishing.
