Card Factory to open first US shops after $25m Garven takeover

Greetings card retailer Card Factory will open its first stores in the US market after acquiring Minnesota’s Garven in a $25million (£19.7million) cash deal.

The group told shareholders the acquisition of Garven, which supplies a customer base of general and specialty retailers, provides the opportunity to ‘further explore design and buying synergies…[and] introduce its own ranges into the US wholesale market’.

The US gifts and celebration essentials market is the biggest of its kind globally, according to Card Factory, with an estimated value of around $70billion.

Card Factory boss Darcy Willson-Rymer said the deal marked an ‘important strategic milestone’.

‘Together with our separate wholesale supply agreement covering over 1,100 stores across the US, it establishes a physical presence in the US market.

‘International partnerships are a key component of our growth strategy.’

The US gifts and celebration essentials market is the biggest of its kind globally, with an estimated value of around $70billion.

Card Factory recently reported a more than 40 per cent slump in first half profits as it faced higher staffing and freight costs, but flagged easing inflationary pressures since the start of August.

The group said on Thursday it had been ‘encouraged’ by trading at the start of its crucial festive trading season and would provide further guidance in January.

Card Factory shares soared 7.2 per cent to 96.8p by midday on Thursday. However, they have fallen more than 30 per since late September on fears of higher costs.

The group said an ongoing programme of productivity and efficiency savings ‘remains on track’ and its full-year expectations are unchanged.

Analysts at UBS said these assurance ‘should be taken well by the market’. 

They added: ‘As it stands, shares are trading at a 40 per cent discount to their 10-year historical average despite offering a stabilised core business with material upside potential from geographical expansion.’