LONDON Feb 7 While bulging store estates are
being blamed for the death of many British firms in a new
digital age, Topps Tiles is adding outlets as it targets
greater market share in its niche retail sector.
The UK tile and flooring firm expects to open eight stores
this financial year, to add to the 322 it currently operates. It
is also relocating and refurbishing existing ones, and believes
it could expand to between 350 and 400 in the longer term.
"Bricks and mortar is alive and well with us," Topps Tiles
chief executive Matt Williams told Reuters. "Stores are still
really important for us if we are to take market share."
While many British retailers are clambering to swap some
stores for fast-growing sales online, Topps Tiles has used its
website more as a window for its products.
Over 70 percent of people go online before coming in-store,
but only 2 percent of group revenue comes from actual online
sales. Many increasingly choose a click and collect service that
requires more stores in more locations.
Topps' profits have fallen heavily during the downturn, from
28 million pounds pretax in 2008 to 12.5 million in 2012, as
tight economic conditions and a constricted housing market -
home buyers are key Topps Tiles clients - weighed on sales.
However, the company says its core product focus and
customer service is helping it take sales from struggling
independent firms, as well as home improvement rivals, which
include B&Q and Homebase. Topps now has 27
percent of the market, it says.
"Although it is a flat market, it is a market moving in our
favour. We are taking from the DIY sheds and we are taking from
smaller specialists as they go against the wall," Williams said.
A first quarter trading update, released in January, showed
the firm grew like-for-like revenues by 1.6 percent in the 13
weeks to Dec. 29, up from a 4.2 percent decline a year earlier.
Improved products and a marketing drive have helped draw in
cost-conscious clients willing to spend more on a one-time job
and more adventurous designs. Trade customers are also expected
to grow from 40 to 45 percent of sales this fiscal year.
In London, where the housing market is relatively healthy
and the group has a strong presence with around 70 stores,
Williams said there was potential to double its numbers.
Recent data has pointed to Britain's central bank's Funding
for Lending Scheme starting to boost home buyers, with loan
approvals for house purchases in December at their highest level
since January 2012.
Shares in Topps Tiles have gained 60 percent on a year ago,
and opened on Thursday at 55 pence. The group is expected on
average to post a full-year profit of 13.9 million pounds.