Topps Tiles Takes the Strain During Q3

Topps Tiles, the UK's largest tile specialist, has begun to take the strain from a weaker consumer environment, as their Q3 sales fell.

On Wednesday, Topps Tiles Plc, announced a trading update for the 13 week period ending 1 July 2018, during which they reported a 2.3% decline in like for like, year on year sales. Their third quarter marks its worst period so far this financial year, after announcing a 3.4% sales increase in Q1 and then a 2.2% decline in Q2. However, it is still an improvement on the 4.7% like-for-like sales decline recorded in the third quarter last year.

The Group is now trading from 375 stores (2017: 367 stores), having opened two and closed three stores during the period.

The Topps press release stated "Trading over the third quarter has been reflective of a weaker consumer environment.  Against this background, we believe that we continue to outperform the overall tile market and we are maintaining our focus on tight cost control and strong underlying cash generation".

"During the period we completed a refinancing of our loan facility, putting in place a new three year committed facility with our existing lenders on similar commercial terms.  The facility comprises a £35 million revolving credit facility with a £15 million accordion.

Strategic Progress 

We continue to invest in the business and to make good progress with our core strategy of "Out-Specialising the Specialists" to extend our market leading position in the UK tile market.  Specific strategic progress in the period includes:

Range - our iterative cycle of change and focus on in-house development continues to allow us to deliver a differentiated and exclusive product range to our Retail and Commercial customers.  During the period we launched extensions to our Statements™ range, enabling customers to use these tiles outdoors, extended our trade brands and listed exclusive product collections into our commercial business, Parkside.  We have launched over 20 new ranges this year.  

Retail - Topps Tiles continues to perform resiliently in a challenging market.  Our response to these challenging conditions has been to continue to invest in our customer offer - in particular through retail promotional activity and continued price leadership in the trade segment.  We have continued our all store investment programme and we now have 140 stores with the latest merchandising treatments.

Commercial - We are continuing our expansion into the commercial segment of the tile market through our Parkside business.  During the period we exhibited at Clerkenwell Design Week for the first time via a pop-up container stand, receiving very positive feedback from commercial customers and generating a pipeline of new leads for future projects.  Parkside also continued to bolster its sales team, with the recruitment of a new team of three sales people during the period.

Matthew Williams, Chief Executive Officer, said: "The trading environment remained challenging during the third quarter but we are pleased with the resilience of our performance which we believe remains ahead of the overall tile market.  Our business has a market leading position, remains well-invested and is in a strong position to capitalise on future growth opportunities as they arise.  We have approximately doubled the size of our addressable market through our expansion into the commercial tile market segment and are focused on leveraging our specialism and competitive advantage across both retail and commercial channels."

Source: Insight DIY Team & Topps Tiles Press Release.

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.