Hobbycraft sales and profits slumped due to coronavirus-related store closures, although trading has improved since April reopening.
Revenues decreased by 8.6% to £177m in the 53 weeks ended February 21, while store sales declined by £53m due to the restrictions and like-for-like sales dropped by 11%.
Operating profit also fell from £2.7m to £1.3m across the year, while EBITDA fell by 7.2% to £14m in the same period.
The arts-and-crafts retailer said the loss of physical sales due to the pandemic was “partly mitigated” by a 152% growth in online sales. The company also introduced new initiatives including click and collect, while the retailer’s Hobbycraft Club grew to more than 5.2 million members.
Chief executive Dominic Jordan told Retail Week: “Going into the pandemic, the percentage of ecommerce sales as part of our overall sales was about 12%. We saw that accelerating to 20% during the pandemic and actually coming out of all the lockdowns it stayed at that level.”
The company will now invest in a new platform for online workshops, as well as a new customer website.
Jordan explained: “There’s no reason why, over the next five years, our ecommerce business can’t be as big as our store business – but that’s not to the detriment of our store business.”
In the latest trading update for the period from April 12 to June 27, total like-for-like sales grew by 15.3% compared with the last comparable period pre-pandemic. Ecommerce sales for this period were 96.1% higher than the level recorded by Hobbycraft two years ago.
Stores continue to play a vital role in the brand’s strategy, with the company opening three new stores in 2020 despite restrictions. Hobbycraft plans to open seven more stores this coming year.
According to Jordan: “We still think there’s life in bricks and mortar – you need to offer some real difference from your competitors in terms of a real experience for customers.”
Pre-pandemic, Jordan reports that more than 200,000 customers were visiting stores for workshops, demos and classes, and the retailer looks set to keep these shared experiences in place when restrictions around social distancing ease to entice consumers back into stores.
The retailer has also been following the growing supply chain challenges facing companies globally.
Jordan concluded: “It’s not a great situation and the price of containers continues to go up. One of the advantages that we have is that 70% of our supplier base is UK based. At the moment, we’re doing OK on this front, but we are watching it closely.”
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