Card Factory lined up for Newcastle’s Northumberland Street
Newcastle City Council has recently received a planning application for the “display of internally illuminated fascia sign and non illuminated projecting sign to front elevation” for 55-57 Northumberland Street. The applicant, I understand, is the rapidly expanding greetings card chain Card Factory.
As far as I can tell, no retailer name is mentioned anywhere in the planning application, but a little bit of detective work soon reveals the ‘Applicant Address’ as Card Factory’s head office in Wakefield, and the ‘Applicant Name’ as the firm’s Property Administrator.
Only established in 1997, Card Factory has been one of the quiet retail successes of recent years. Following a combination of organic growth and acquisitions, the business has expanded to 490 stores nationwide, making it the second largest UK greetings card retailer after Clinton Cards.
Of the two, however, Card Factory has enjoyed the recent momentum, delivering year-on-year sales growth of 27% in 2009, and a £29.4m pre-tax profit on a turnover of nearly £168m. Clinton, in contrast, had to turn over £345m – double that of Card Factory – in order to generate a similar pre-tax profit (£24.1m). Just this April, Card Factory’s founders, Dean and Janet Hoyle, enjoyed a “multi-million pound windfall” after selling a £350m majority stake in the company to the London-based private equity firm Charterhouse.
Card Factory has already become an established presence in the North East, with Tyneside alone having branches in Gateshead, Blaydon, Wallsend, Jarrow, North Shields, South Shields and Whitley Bay. However, Northumberland Street will be the retailer’s first foray into Newcastle, and is certainly a bold choice for a chain that tends to be associated with the value end of the greetings card market.
55-57 Northumberland Street, let’s not forget, is very much at the heart of what has traditionally been Newcastle’s prime retail pitch, sat between the Fenwick department store and the main Eldon Way entrance to Eldon Square. Previously Foot Locker, the unit became vacant as part of the reshuffle of Newcastle city centre retailers that has followed the opening of Eldon Square South. Republic, you’ll recall, kicked things off by moving from its previous store in Douglas Way to a new flagship in St Andrew’s Way, paving the way for Foot Locker to move into the more fashion-focused pitch freed up by Republic.
I like Card Factory – the prices are reasonable, and the quality and range excellent – and I certainly prefer its lively, unpretentious stores over the strangely soulless experience that I tend to find at Clinton’s. However, news of Card Factory’s planned Newcastle store does reinforce what seems to be Northumberland Street’s shift towards the value end of retail, coming hot on the heels of the new Peacocks store.
To some extent, of course, this is merely a reflection of those retailers that are currently doing well and looking to expand. On the other hand, it’s becoming increasingly difficult to imagine top-end names opening up on Northumberland Street. When toy retailer Hamleys had its ill-fated foray into the provinces in the 1980s, it seemed natural for its Newcastle store to open up in Northumberland Street (in the premises now occupied by HMV). If it were doing the same today, you’d have to imagine it heading straight for St Andrew’s Way, and a berth among Apple Store, Guess, Hollister and All Saints.
The tide could yet, of course, shift back in Northumberland Street’s favour. The JD-owned branded fashion chain Bank is set to open in the nearby Priceless Shoes unit, and will surely be an improvement on the increasingly unappealing and tacky-looking store that’s there now.
The big test, however, will be on what occupies the unit that Next will leave empty when it moves into its new Eldon Square flagship. Received wisdom seems to be that the site represents the perfect opportunity for Zara to make a return to Northumberland Street, after its short-lived stint – in a unit that was too small for it – a few years ago.
In my view, Zara’s the kind of midmarket but well regarded retailer that Northumberland Street needs to attract if its to hang on to its status as Newcastle’s premier shopping thoroughfare. With Next due to move out early in 2011, it may not be very long before we know the answer.