Shares in value-for-money greeting cards-to-gifts retailer Card Factory (CARD) cheapened 3.5% to 48.1p on Friday following the news chief executive Karen Hubbard will step down at the end of June after a testing four years in the hot seat.
The change at the top comes at a difficult time for Wakefield-headquartered Card Factory, which expects high street transactions to be hurt due to social distancing measures and also faces intense online competition as well as higher costs of running its brick-and-mortar outlets in the post-Covid age.
NEW BROOM NEEDED
According to today’s statement, Hubbard has implemented ‘a solid platform for future growth, recruited a strong executive board, overseen entry into new channels and markets and led the development of the refreshed strategy which is now more relevant to the market and macro-economic environment we face today’.
And yet the Card Factory board still believes a new broom is needed to execute its turnaround strategy and implement the next phase of the hard-pressed retailer’s return to growth. Non-executive chairman Paul Moody will take on the role of executive chairman until Card Factory names a new chief executive.
SOCIAL DISTANCING HIT
Card Factory recently warned of a hit to its brick-and-mortar business from social distancing measures, although online sales surged during the coronavirus-induced lockdown.
The company also become the first major UK firm to announce a hat-trick of dividend cuts, the 5p per share special dividend went after January’s profit warning, the anticipated 6.4p final payment was culled alongside March’s Covid-related trading update and Card Factory doesn’t expect to make any distributions of any kind for the fiscal year to January 2021.
Results for the year ended 31 January 2020 showed a disappointing 4.4% decline in pre-tax profit to £65.2 million, while like-for-like sales softened 0.5% amid weak consumer confidence and a drop in high street footfall in the second half.
Card Factory also said it was unable to give an outlook for the 2021 financial year.