Topps Tiles Feels the Pain
The miserable summer felt by retailers all across the United Kingdom has only been added to by the news that Topps Tiles, the biggest tile and wood flooring specialist in the country, which sells many flooring-related products including those ideal for helping with wood floor sanding, has seen a sharp fall in sales over the season.
The company’s shares fell by as much as 22% following its revelation on Thursday that the economic downturn will result in it most likely not being able to meet City forecasts, with like-for-like sales being down by over 10% in the seven-week period leading to the 20th August, a much faster decline than the 1.9% drop recorded in the previous 13 weeks.
Topps Tiles, which has more than 300 stores all across the United Kingdom, blames a fall in consumer confidence as the primary cause of its most recent sales performance, while analysts believe that increased competition from large DIY chains and low levels of housing transactions may also be among the reasons.
“We expect the housing market to remain subdued for the rest of the year and next” says Seymour Pierce analyst Kate Calvert. “There is limited scope for material cost savings, and competition is intensifying both from the DIY sheds and the increasing number of home stores.” Calvert notes that the City’s initial forecast for the company to make a profit of £15.5 million this year has now been revised downwards to between £11 and £13 million.