Card Factory shares slump as it blames weather for profit hit
Shares in Card Factory fell by almost 10pc in trading on the London Stock Exchange yesterday after the greeting cards retailer cut its profit forecast.
The group expects earnings for the year to be in the range of £89m to £91m (€99m-€101m).
Card Factory had previously expected to report earnings of £93m for the 12 months.
The company blamed a "weak consumer environment" and "extreme weather conditions" for the projected fall in earnings.
Overall, the group, which has stores in a number locations in Ireland including in Dublin, Naas, and Ashbourne in Meath, reported an increase in total group sales of 3.2pc for the six months to 31 July.
However, its like-for-like sales declined 0.2pc due to the bad weather, as well as the "weak" environment.
The group said that it was continuing to experience momentum in Ireland, with seven trial stores now open.
"We continue to experience a weak consumer environment, made all the more challenging by the impact of this year's extreme weather conditions on high street footfall," said CEO Karen Hubbard.
The warning comes on the back of news that Homebase is set to close 60 stores in a further blow to UK retail.
Hilco Capital, the new owner of Homebase, will next week detail plans to close around a quarter of its stores, threatening more than 1,000 jobs, according to a Sky News report.
Sky News said Hilco, which acquired Homebase from Australian group Wesfarmers for a nominal £1 in May, was expected to outline proposals for a so-called company voluntary arrangement (CVA) restructuring that would close roughly 60 of Homebase's 249 stores. It's unclear whether the company's 11 stores in here will be affected. Homebase also has a number of stores in Northern Ireland.
A spokeswoman for Hilco declined to comment on the report.
A string of British store groups have either gone out of business or announced plans to close shops this year, as they struggle with subdued consumer spending, rising labour costs, higher business property taxes and growing online competition.
CVAs, which allow firms to avoid insolvency or administration, have been adopted by retailers including fashion chain New Look, floor coverings group Carpetright and mother-and-baby goods firm Mothercare UK.
Hilco specialises in distressed or under-performing assets.
It bought and ultimately closed Xtra-Vision in Ireland, as well as the HMV stores in the Republic of Ireland - leaving a store in Belfast open.
Other companies it has invested in include ceramics company Denby, flooring product manufacturer Kraus Group, and travel clothing company Tilley Endurables. (Additional reporting Reuters)