Right on the tiles as Topps beats the weather with strong sales

SHARES in Topps Tiles inched up after the tile and wood flooring specialist reported strong sales figures despite the snow that caused chaos for retailers in December.

Analysts gave an upbeat response to the results, despite concerns about the level of consumer spending this year.

Topps said like-for-like sales increased 2.2 per cent in the final quarter of 2010, representing a slight slowdown on the 3.2 per cent growth in the first seven weeks of the period.

Management told analysts that sales would have been 1 per cent higher if not for the snow.

Topps, which has 15 stores in this region, ranging from York and Harrogate to Sheffield and Rotherham, is recovering from a dip in sales and profits caused by the recession and has benefited in the past year from the slump in the housing market as consumers opt to improve their homes rather than move.

Leeds businessman Victor Watson, best-known as a former chairman of Waddingtons, is a former director of Topps Tiles and stepped down in January 2009 after 10 years.

Barry Bester, chairman of Topps, told the firm's annual general meeting yesterday: "We experienced some disruption during December from the extreme weather conditions and I feel the business responded well during a testing period."

Figures from the British Retail Consortium released on the same day showed that sales of furniture and floorcoverings dropped in December.

Mr Bester described Topps' update as positive and said he was "particularly satisfied" with the performance over the quarter.

The retailer, which operates 312 stores, plans to open 10 stores over the next year and is currently looking for sites. To support the expansion, Topps is building a 3m warehouse at its Leicestershire headquarters.

Shares in Topps closed up 1.6 per cent last night at 79.5p, after rising by more than 60 per cent since their trough in June.

Kate Calvert, an analyst at Seymour Pierce, described the trading update as "a very solid performance" but said it would come under increasing pressure from "big shed" retailers such as B&Q, which has a 20 per cent share of the tiles market and is ramping up its efforts.

David Jeary, an analyst at Investec, expressed concern about "the robustness of consumer spending on bigger ticket discretionary categories in the face of pressure on disposable incomes, combined with a weaker housing market."

Analysts at Goldman Sachs and Peel Hunt rated Topps' shares as a "buy".

The first Topps Tiles store was opened in Manchester in 1963.

The firm currently has a 25 per cent market share.