Heatwave causes problems for UK tile firm after 23 store closures
A major UK flooring and tiles firm says the extreme heat that baked Britain in the past few weeks has added to its challenges after difficult trading lead to it closing more than 20 shops earlier this year. A "number of long-standing temperature records" were either "provisionally broken or equalled" in June as heatwaves swept the country, with millions of Brits put under rare amber and red Met Office warnings for extreme heat, the national weather agency said.
The sweltering temperatures led to sleepness nights, school closures, and travel disruption - and according to Topps Tiles, it also had a marked affect on its trade as it forced tradesmen to pause work. The company revealed the impact the weather had as it warned over annual profits following worse-than-expected sales. The Leicestershire-based chain said sales fell 1.8% in the three months to June 27, with flat like-for-like revenues across its main Topps Tiles brand, which worsened through the quarter.
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The company said it had seen demand increase for lower priced products due to wider uncertainty among customers, adding that the searing heat at the end of last month compounded trading issues.
Topps said: “Recent periods of extreme heatwave conditions led to temporary work stoppages among housebuilders and traders, further affecting activity levels.
“Whilst there is likely to be a catch-up over a six-month period, this is unlikely to come back fully in our financial year which ends in September.”
The group said it now expects underlying profits for the year to the end of September to be above £6.5 million – signalling a sharp decline from the previous year’s £9.2 million. Shares in the firm fell 8% soon after market opening on Wednesday, July 1.
However, Topps CEO Alex Jensen said the firm "continues to outperform the wider market despite weaker consumer sentiment and an increased focus on lower priced products".
“We’re making significant strategic progress across our priorities and the self-help actions we are taking to support profitability are working and will position the business for long-term sustainable growth," she added.
"In the short term, the macro-economic environment continues to remain challenging.”
The group has been slashing costs in the face of more difficult trading and in April announced 23 shops would be pulling down the shutters for good, with 7% of its 319-strong estate leaving the high street.
Store closures in its Topps and CTD brands have further put revenues under pressure. Topps saw its deal to buy CTD out of administration probed by the Competition and Markets Authority (CMA), which required it to sell off a number of CTD stores to appease concerns.
The firm now has 23 CTD stores, down from an initial 31. In December, it also bought the brand of collapsed rival Fired Earth in a £3million rescue deal after latter entered administration in October, resulting in the closure of its 20 UK showrooms and 133 job losses.