Topps Tiles to cut costs as ekes out marginal first half sales growth
Topps Tiles PLC on Wednesday said it plans to close 23 stores in a bid to improve profitability as sales growth stalled in the first half of its financial year.
The Leicestershire-based tile retailer said group revenue, including CTD, was £142.7 million in the 26 weeks to March 28, down 0.1% from a year before.
The firm said sales were hurt by volume loss from the ‘lengthy’ Competition & Markets Authority process.
In August 2024, Topps Tiles acquired the brand and certain assets from CTD Tiles Ltd. The business currently trades from 22 stores, down from 31 in the prior year due to commercial property decisions and the requirement to dispose of four stores following the CMA investigation.
Excluding CTD, revenue grew by 2.1% annually. However, following a ‘robust’ first quarter, revenue growth in the second quarter ‘moderated slightly’, though remained positive at 0.6%.
Topps Tiles said it continues to outperform the wider UK DIY market, which declined by around 2.5% over the equivalent period, based on data from the Barclays UK Consumer Spend Report for Home Improvements and Do-It-Yourself.
CTD remains on track to return to profit in the financial year, with like-for-like growth of 1.0% in the first half, the company said.
LFL revenue growth for the Topps Tiles brand was 0.1% annually in the 26 weeks period.
Reflecting the softer home improvements and DIY market, and to offset government and macro-driven cost inflation, the company said it is cutting costs.
This includes closing 23 ‘underperforming’ stores across the financial year, which Topps Tiles said will lower revenue but improve profitability.
Online brands have continued to perform strongly with sales up 21% in the 26 weeks.
Fired Earth has traded ‘well’ since acquisition, already delivering a positive profit in the first half, with further growth expected in the second half, the company added.
Last December, Topps Tiles acquired the Fired Earth brand, website and stock.
Topps Tiles will publish interim results on May 19.
Shares in Topps Tiles were down 6.9% to 32.20 pence each in London on Wednesday morning.
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