Hobbycraft has reported profits of £7m for its full year on the back of a 9% increase in revenue and heavy investment in initiatives including a new loyalty card.

The arts and crafts retailer’s EBITDA fell 52% from £13.5m as the company invested in new infrastructure including the £3m opening of a distribution centre in Burton-upon-Trent.

Revenues grew 9% from £119.1m to £129.6 for the year ending February 23, 2014.

Hobbycraft chief executive Catriona Marshall also said profits had been impacted by a realignment of its pricing plan as the retailer seeks to become a “volume and value” retailer capable of competing on price with etailers Amazon and eBay and discount retailers such as The Range.

The retailer recorded a 140% increase in ecommerce sales during the period, albeit from a low base.

Online sales currently make up around 5% of the company’s sales, compared with an average of roughly 15% across the rest of the industry.

Marshall said the immediate target was to get Hobbycraft’s online business up to 15% of total sales as it introduces new initiatives including a loyalty card and ‘order in store’.

The loyalty card is due to launch in October and will be rolled out to all customers by Christmas.

Hobbycraft already has a membership scheme with 400,000 members and the card is being introduced to tie up in-store transactional data with the company’s online shopping data.

Members of the loyalty card scheme will be sent personalised offers depending on their shopping habits that will be segmented by their hobbies.

Hobbycraft launched its ‘order in store’ initiative two weeks ago, which enables customers in a store to request a product to be delivered to the store or their homes if it is not available in the store when they visit.

The retailer is also on the cusp of launching a responsive website, which Marshall believes will boost online sales as people increasingly turn to mobile devices to carry out their online shopping.

Hobbycraft has just completed the third year of a three-year investment plan and Marshall said that in the future “there will be less change in terms of infrastructure but a big focus on multichannel”.

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