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136. Bull, Bear & Beyond – Card Factory executive interview
6 Plays2 months ago
In our interview, Card Factory’s CEO Darcy Willson-Rymer outlines the company’s progress reported in its H126 results, focusing on the performance of the stores, online activities and partnership businesses. He then gives some insight into the recently announced acquisition of funkypigeon.com, including what the acquisition provides to the group and the integration process. Darcy concludes with Card Factory’s outlook for the remainder of FY26 as the company’s key trading season approaches.
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About ‘Bull, Bear & Beyond’
Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
About Edison:
Edison is a content-led IR business. We believe quality investment content should inform all investors, not just brokers. Our mission: engage and build bigger, better-informed investor audiences for our clients.
Edison covers 50+ investment trusts, read about them here: https://www.edisongroup.com/equities/investment-companies/
Original interview published on 28/10/2025 and reposted as a podcast
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Transcript
Introduction to Card Factory's Interim Results
00:00:07
Speaker
Hello, I'm Russell Poynton from Edison Group. Today, it's great to have back with us Darcy Wilson-Reimer, the Chief Executive Card Factory. Card Factory reported their interim results about two weeks ago.
00:00:20
Speaker
and We're going to go through that and have a think about the outlook for the year. Welcome back, Darcy. Thank you. Thanks for having
Half-Year Results and Growth Strategy
00:00:27
Speaker
me back. In the first half results, um there was overall good revenue growth and you're demonstrating that typical half one, ah half two seasonality of the profits.
00:00:38
Speaker
Lots of moving parts within that but amongst the businesses. so let's go through those businesses in order. So first of all, looking at the card factory stores. Revenue growth slowed a bit versus what you reported through that financial year 2025.
00:00:53
Speaker
ah There's lots of reasons why that that was the case. in into you know the highest you know The high street's been more challenging. But can just talk about that? you know What's the external environment been like? and what And more importantly, how have you been able to offset that? Because youre I think you're relatively pleased with how you performed in the first half.
00:01:09
Speaker
Yeah,
Seasonal Performance Insights
00:01:10
Speaker
i look, Russell, first of all, ah overall, we delivered growth of just shy of 6%, which we think in today's market is ah is a really good performance.
00:01:21
Speaker
um And if I think about um our stores, which is obviously the lion's share of our business, our store sales growth grew by 3%. Half of that was off the back of like-for-like growth and about half of that was new stores as we opened 13 net new stores in in in in the first half.
00:01:42
Speaker
um But of course, we continue on our strategy of growing our card sales and we continue to grow market share in card. But of course, we're disproportionately growing our other two primary categories of gifting and and um and and celebration essentials.
00:02:01
Speaker
um And so so overall, ah you so we would continue um to grow well. And if I look back over the last three years, we've grown like-for-like sales of nearly 15%. And we see the strategy in action and we see growth.
00:02:20
Speaker
that's that strategy you know continues to be the right one and continues continues to work. We did see a little variability. so So we had very strong spring season, so Valentine's Day, Mother's Day, ah you know Father's Day.
00:02:34
Speaker
We saw a little bit of um softness on the high street in the summer. But, of course, as we look forward, so we're a couple of weeks away from Halloween, which is... um
Partnership Business Expansion
00:02:47
Speaker
ah And that's an emerging, um growing season for us. And then, of course, we we've got, you know, Christmas to look forward to.
00:03:00
Speaker
And um within the the divisions, partnerships was the highest growth, right? But there's some contribution from so the businesses you acquired there at the end of last year for the first time. So, again, there are lots of businesses within the partnerships now. So what do you what do you think are the key takeaways from the partnerships business in the first six months or so?
00:03:17
Speaker
So there really a couple of things. So first of all, in our in the businesses that we um ah re-tendered and maintain those businesses, so thinking about Aldi and the Reject Shop in Australia,
00:03:34
Speaker
We have moved those business models or in the middle of moving those business models to what we call the full service model, where we control distribution to the stores and the merchandising on the shelves. So we know when we do the merchandising, then we have a better offer, you know, sort of in front of the customer. So we've completed that with Aldi and we're seeing good like-for-like growth in that estate. We're about halfway through that in TRSC in Australia. And again, the stores that we've done are are showing really good growth. We'll probably pause that for Christmas and and resume resume after. So that we're able to, know, we've won that business. We've been able to maintain it and then grow upon it. So I think that, you know, that would be, you know, a key takeaway.
00:04:28
Speaker
And now if I think about um the U.S., which is um clearly the the area where, you know, if our partnership business is going to be successful, then we need to crack the U.S. So we acquired the Garvin business last year. That is performing well. So that's exactly where we're We said it would be at at this point.
00:04:50
Speaker
And then the intention is to take the full service rollout to the partner that we're testing within in America. And then we will build the card capability in the Garvin business probably by the end of next year. And and
Online Strategy and Funky Pigeon Acquisition
00:05:04
Speaker
therefore, we have cards, um you know gift wrap bags or card celebration essentials. we've got um We've got our team that will be ready um to go when the time is right for us to sign up new customers. and And moving on to online, ah there's been some interesting developments in recent months, obviously, with the acquisition of Funky Pigeon. But the first half, um you you know, the revenue s slipped a bit. And you talked you talked about this last time you came in, in terms of changing the offer, in terms of reducing the stock cards, that type of thing. So so that's dragging revenue at the moment. Could you talk about what are the positives that you you can probably pick out from the online performance? Well,
00:05:43
Speaker
Well, I think the most important thing to focus on the strategy. But in terms of carfactory.co.uk, we did what we said is we have removed all of the stock products. So i've I've talked before about when carfactory.co.uk was set up all those years ago, it was set up like a big store. So the majority of product that we were selling was product that we sell in our stores. And that's not the channel for which to do it. um We clarified at the um c prelims, I think we talked about it here, for online, our strategy is to go after two missions.
00:06:19
Speaker
One is personalise a card, send it to your loved one with an attached gift, so what we call the direct to recipient with attached gift. um And then the second part of the market is the extended celebrations. So this is um you you want a themed birthday party. um We want to create the environment online where you can go and curate that range and just say, you know, it's it's a birthday.
00:06:49
Speaker
male, eight years old Spider-Man party and we'll curate everything for you and send it to your local store to be collected or we can send it send it to, know, direct to your to your house. So we need to build that mission. So those are the two missions that we're going after.
00:07:04
Speaker
What Funky Pigeon allows us to do is to accelerate that strategy. So they're further on the journey of direct-to-recipient with attached gifts.
00:07:15
Speaker
um And so, mean, effectively, we acquired that business about seven or eight weeks ago now. We're in the middle of the separation and integration process.
00:07:26
Speaker
Over the course of the next 12 or 18 months, we will deliver £5 million pounds worth of synergies that we've identified. What that does is gives us a structurally profitable online platform from which to grow from to go and grow primarily in those two missions.
00:07:47
Speaker
That's a good introduction to funkypigeon.com. So there's a lot of things to do over the next short while as you integrate the business. and So could you just give some idea of what are the key milestones that we should watch out for over the next year or so?
00:08:00
Speaker
Yeah, so clearly the first and foremost thing is the separation um from old owners and and integration into Card Factory. So we're well underway.
00:08:13
Speaker
um As I've mentioned before, we've identified... um ah Five million pounds worth of synergies. And that they are typically in fulfillment, um product range. Tech platform is the primary way to do that. so um So we need to go through the process of making sure, getting ourselves onto one tech platform, streamlining our product race. So we've got the kind of right offer you know, at the right value. And then from a fulfillment perspective, we now have two fulfillment centers and it's about configuring that so that we're basically the lowest cost, you know, to operate. So that's effectively what we'll be focusing on over the next sort of, you 12, 18 or so.
00:08:59
Speaker
ah eighteen months or so um that will then allow us to build on those two propositions um and ah and and and basically grow and get our fair share of the online market. On
Simplify and Scale Program
00:09:13
Speaker
numerous occasions, we've talked about the seasonality of the profitability in the business. And a key part of that is the simplifying scale initiatives that are happening over many years. So could you just talk about what's been achieved in the first half and what, you know, well hope hope to we help to will help drive profits in the second half of the year? Yeah, I think, so Simplify and Scale is our, is the program that we've basically put in place um that looks at over the long term. So it's a long-term program covering multiple years of how we drive productivity and how we drive efficiency, you know, ah in the business. And because
00:10:00
Speaker
we're vertically integrated and we have the vertically integrated model, we have more levers at our disposal than perhaps others have. So it's how do we um what can we do with the design studio,
00:10:14
Speaker
um to to drive efficiencies, what can we do in the factory, what can we do in the warehouses and what can we do in the store, but what's the interplay between them? So um with the factory working with the designers to say, well, if the product is designed like this, I won't have to slow the machine down or I can get more efficient use of a board or more efficient use of foil and and being able to to play the tunes, you know, sort of all the way through. um And we have this year over 20 million pounds of inflationary costs coming to the business.
00:10:51
Speaker
14 million of that is between um national living wage and the national insurance. And the rest is is sort of ordinary inflation. We've already offset about 9 million of that.
00:11:03
Speaker
And we will see our way for the rest of the year. um ah to offset um the rest. And it's just, it is, um and everything that needs to be in place in order to do that is already in place. So bringing the new till systems and sort of accelerating that,
00:11:23
Speaker
um gives us some efficiencies in store, um but also gives us the platform to to to do more. We've done quite a bit in store to sort of optimise labour. We've done some stuff in the supply chain um to to drive efficiency and and reduce cost.
00:11:42
Speaker
and it's it's um um And we've already got line of sight for next year. to the majority of initiatives that will offset, you you know, next year's inflation. So
Preparations for Upcoming Trading Season
00:11:55
Speaker
people should think of it more as a way of operating and a way of being um as opposed to something that is is sort of time bound. So Darcy, we're we're entering your key trading season now. So could you just talk about your enthusiasm and the outlook for the half year and the full year?
00:12:14
Speaker
Yes, so we we're we're now in the golden quarter um and I think the team is really excited. we're as good in this setup as we can be starting with Halloween, which is in, already mentioned in a couple of weeks time.
00:12:31
Speaker
um And we are putting, ah we've allocated more space um and more lines to Halloween this year. i think the range is fantastic. That's that's in store.
00:12:43
Speaker
um so So, you know, looking good. In terms of Christmas preparations, um we're excited about the range. So about 30% of the card is new, um including a premium range that we put in. So we trialed that last year in about 250 stores. It sold really well. So we're putting it in all stores um this year. So we're excited about that.
00:13:09
Speaker
On the... um On gifting, about 80% of newness, including a new range of Secret Santa.
00:13:21
Speaker
We'll see more male gifting this year, where we've typically under-indexed. um And then in celebration essentials, bags and wrap and party, about 90% of the products new knew in front of the customers.
00:13:35
Speaker
So we had all of our store managers together, Golden Quarter Conference couple of weeks ago, where we took everybody through the detail of the Christmas plans, not just the products, but products.
00:13:45
Speaker
but also the preparation and how the stock's going to come in and how we're going to lay out back rooms and all of the stuff needed. And our teams are genuinely excited about um you know about what's to come. And we're as set up as well as we can be.
00:14:04
Speaker
All the stock that we need for Christmas is either in the store, in the warehouse, or physically on the water. um So from a stock build perspective, we're probably ahead of ah by a couple of weeks of of where we've been in in prior years. So we're, know, we're basically set. and um And I think, you know, we carry no more risk this golden quarter than we carry, you know, in every single year.
00:14:33
Speaker
um And, you know, The only thing we're mindful of is and is the budget and consumer confidence. um But we also know that our customers tell us celebrating their special moments are really important.
00:14:50
Speaker
And so
Conclusion and Future Outlook
00:14:51
Speaker
we're looking forward to a good Christmas. Oh, great. and Well, Darcy, thank you for coming in and talking about the first half results. And we'll look forward to hearing how the second half goes in the new year.
00:15:03
Speaker
Thank you.