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Exclusive: Founder considers putting Card Factory up for sale

THE entrepreneur Dean Hoyle is considering a sale of his Card Factory business, the Yorkshire Post can reveal.

The Wakefield company confirmed yesterday it has appointed KPMG to advise on its future. It is understood that one option under consideration is a management buyout with private equity backing.

Mr Hoyle and his wife Janet founded the greeting cards business in 1997.

It is now one of Yorkshire's fastest growing companies with 4,000 staff and nearly 480 stores.

If the Hoyles do sell out, it could provide a substantial war chest for Huddersfield Town FC. Mr Hoyle, the chairman, took over majority shareholding of the club in the summer and is a lifelong fan.

Richard Hayes, managing director of the Card Factory, said KPMG were retained as advisers "just to explore options open to the shareholders of this business".

Asked about a possible sale, he said: "We have not even started the process. All we are doing at the moment is understanding our options."

He confirmed that Mr Hoyle, 42, had taken a step back from the running of the company.

The management team consists of Mr Hayes, a former Royal Bank of Scotland corporate banker who was relationship manager to the Card Factory, group finance director Darren Bryant, formerly the corporate finance partner for Yorkshire at PricewaterhouseCoopers, and logistics director Christopher Beck, who used to work at Grant Thornton in Leeds.

The chairman is Keith Pacey, who is the executive chairman of Maplin Electronics.

Mr Hayes said: "We believe we have a very strong management that's capable of continuing to grow this business which is what we are all driven by."

The deals market has been depressed since the credit crunch but an appetite remains for fast-growing businesses like the Card Factory.

The most recent published figures for Sportswift, which trades as the Card Factory, put turnover for the seven months to the end of January 2008 at 90m with a profit of 17m.

The company has yet to publish its annual figures for the year ending January 2009, but they are expected to show considerable growth and profitability.

Some estimates suggest turnover and profits could have doubled.

A source said: "It is a fantastic company and it will be a big transaction when it happens.

"In terms of local mergers and acquisitions it will be one of the biggest transactions in the next 12 months probably.

"Dean started from one store and has built it up to approaching 500 stores. It is a great success story."

Another source said: "The Card Factory's value proposition is just way ahead of any other card retailer.

"The quality of card you get for the price you are paying is exponentially better than any other proposition in the mar-ket.

"That's why it has grown so rapidly and has taken significant market share."

The Hoyles are majority shareholders.

The other principal shareholders are Stuart Middleton and John Waddington, who were involved in two companies bought by the Card Factory, Tony Barraclough, a director, and LDC, the venture capital arm of Lloyds Banking Group, which invested in the company in December 2006.

The business designs, manufactures, supplies and sells greetings cards, gifts, plush items, novelties and gift wrap.

It operates in a buoyant sector: according to recent research from the Greetings Card Association, UK consumers spent 1.7bn on cards last year, with more than 1.5 billion cards being sold.

Christmas cards accounted for 43 per cent of volume at 641 million cards and 19 per cent of the value of the industry, worth 324m.

'Sustainable model in good and bad times'

Dean Hoyle was last month named as Ernst & Young Entrepreneur of the Year in the retail and consumer products category.

He began selling cards from the back of a van. In 1997 he opened his first store and within six years the business had grown to 38 stores.

The Card Factory will have 480 stores by the end of the year.

Stuart Watson, partner at Ernst & Young, said: "Dean Hoyle has a sustainable business model in good and bad times and great potential to take this model international."

 
 
 

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