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RETAILENVIRONMENT


JOHN RYAN


Why has Card Factory worked?


T’S AROUND 17 years since the fi rst Card Factory store welcomed shoppers. That was in Wakefi eld in 1997 and, back then, the proposition was simple – cheap greetings cards for customers who felt the price demanded of them when marking an important occasion was, well, just a little too steep.


I


Last month, Card Factory became an offi cially mature and big business with the fl oat on the London Stock Exchange at £2.25 per share. Now investors had the chance to get a little piece of the discount card business action. And at the time of writing it looked as if this was likely to be a successful IPO, although who can account for the vicissitudes of a stock market which did see an initial drop in the share price from 225p to around 213p.


So, what has turned a single-shop business into a 700-plus store behemoth that’s worthy of venture capital backing and then a public offering of stock in the company?


Could it be the fact that we live in discount Britain where everything is based on the idea of doing a deal, whether it’s buying a greetings card or some smoked Black Forest ham? Could it be that the shops look winsome and the kind of places we’d all like to spend sometime?


Or could it just be that Card Factory have stayed the course where others have foundered


and have had a keen eye on what shoppers want? The latter, of course, is by far the most likely explanation – all you’ve got to do as a retailer in search of success is to give people what they want and in the current climate, many clamour for inexpensive.


Something


of the kind can be seen with the arrival of the German discount supermarkets Lidl and Aldi in this country. Neither provide a glamorous setting for the limited range of products that they offer but, on the other hand, the quality is high and prices are low.


The old adage that you can sell good products


John Ryan is Stores Editor at Retail Week where he’s worked for more than a decade covering store design, visual merchandising and what makes things sell in-store. In a previous life he was a retail buyer. T: 07710 429926 twitter: @newstores


18 www.greetingstoday.co.uk


Is the stock market debut of the discount card retailer a sign of the times, or it a matter of horses for courses, John Ryan looks at the issue.


from an indifferent store environment, but it doesn’t work the other way around comes into play at this point. Lidl, Aldi and Card Factory all major on the notion of anti-style. You know what you’re getting when you walk into any of these emporia and the back-to-basics nature of the fi t-out says all you need to know about the price tags that will be attached to the merchandise.


This is a two-way street. Shoppers get no nasty surprises and the retailer doesn’t have to spend vast amounts on creating a winning interior that will put people in the mood for digging deep. The problem is this only really works for fairly basic items – although the lobster at Aldi is not half bad – and, as soon as you head upscale, then a corresponding hike in the store appearance is required.


The truth of the matter, it would seem, is that when it comes to selling greetings cards it’s a case of horses for courses.


At the bottom end, you can get away with cheap and cheerful without impacting on sales but head into the world of, for example,


handmade cards, however, and things are a little different.


Card Factory’s success is based, it would


appear, on a large segment of the card-buying population’s need for decent quality at a low price, but this doesn’t mean everybody will want to shop there.


In the big towns and cities there’s still plenty of room for quality environments selling more expensive stock where a margin is waiting to be realised.


That said, you can’t knock success and, at the entry price level end of the market, buying both Card Factory shares and products would seem like common sense.


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