ONE OF the greatest retail success stories of recent years has confirmed plans to float on the London Stock Exchange.
Yorkshire’s Card Factory hopes to raise £90m in an initial public offering next month, joining a spate of store groups seeking flotations as the outlook for consumer spending improves.
The IPO will represent a major milestone in the rise of the Wakefield company which started with one store in 1997 and has grown organically to more than 700 today.
Much of the growth has taken place during the economic downturn and the business was subject to one of the region’s biggest private equity deals since the financial crisis when Charterhouse Capital Partners bought the company from founder Dean Hoyle for £350m in 2010.
Richard Hayes, chief executive, told The Yorkshire Post: “Over the last four years Charterhouse has supported us with some fairly significant investment to prepare this company for the public arena. Now we are of a scale that’s befitting of a public company.”
Card Factory has 6,500 staff across the country, including 1,000 in Yorkshire. It plans to increase its estate to 1,200 over the coming years. The expansion is funded internally through retained profits.
Mr Hayes said: “We are very focused on maintaining the rollout programme of the last 10 years, which has been to open a store a week or 50 a year. We are keen to keep that momentum going over the foreseeable future.”
He added that the company has invested more than £50m to develop its vertically integrated business model over the last 10 years.
Card Factory benefits from in-house design, printing and warehousing, which significantly reduces external costs and keeps the price down for customers.
The majority of its cards sell for under £1.
Mr Hayes said: “Our focus is on providing exceptional value and quality to our customers. That’s really been our mantra for a number of years.
“The model has worked well both in good times and also more challenging times.”
The company released results for the year ending January 31 2014, which showed a 9 per cent increase in sales to £326.9m. Underlying earnings before interest, taxes, depreciation and amortisation rose 9.2 per cent to £80.4m.
Card Factory sold more than 285m cards over the year - or 5.5m a week.
Mr Hayes said the card market is very resilient and is growing by 1.4 per cent a year, with only 3 per cent of sales being made online.
Card Factory also announced the appointment of a new group chairman yesterday in Geoff Cooper, the former CEO of Travis Perkins and current chairman of Dunelm.
Mr Hayes said Mr Cooper’s experience in working with the family founders of Dunelm and City investors will be helpful to Card Factory as it makes the transition to public company.
Mr Hoyle, the owner of Huddersfield Town Football Club, will remain as non-executive chairman of the operational board.
Other new non-executive directorships include Octavia Morley, MD of Crew Clothing.