Bonuses are cut and hours reduced as Topps’ sales tumble

The group, which employees 1,700 staff across 322 stores, said it had targeted £2m in cost savings by the end of September.

A spokeswoman said the measures included cutting performance incentives for staff and the number of hours worked by employees, as well as head office costs.

Topps posted a slump in underlying pre-tax profits from £5.6m to £4.7m in the six months to March 30 and revealed it was still yet to see any boost from improving conditions in the housing market, with trading worsening in recent weeks.

Like-for-like sales over the eight weeks to May 25 decreased by 2.6 per cent, compared to a 3.2 per cent increase a year earlier.

Chief executive Matthew Williams said: “In response to the weaker market conditions we saw across the second quarter, we are implementing a programme of self-help initiatives and significant cost reduction measures and are pleased with the progress made to date. However, we are mindful of the current trading environment which has deteriorated slightly over the last eight weeks.”

Mr Williams added the business continued to be cautious about the sales outlook for the full year.

The group had warned earlier this year that it had expected a half-year profits slump amid weaker-than-expected demand.

Like-for-like sales in the first quarter were up 1.6 per cent in the first quarter, but dropped back 2.1 per cent in the three months to the end of March, translating to a 0.2 per cent decline over the six-month period.

Topps is banking on an upturn in property buying, saying long-term investments including its store and online offering to consolidate its position and build market share will make it well-placed to take advantage, but Mr Williams admitted prospects remained uncertain.

He said: “While recent indications of an improvement in the UK housing market give encouragement, it is too early to judge the sustainability of this trend and given the historic relationship between housing transactions and home improvement spend, any impact on trading conditions can be expected to lag a recovery.”