Greetings Today magazine, giving you the bigger picture

Card Factory owner prepares to sell

Rumours that Card Factory chairman and majority shareholder Dean Hoyle appear to gathering pace.

The company, known infamously for selling discount greetings cards, has allegedly appointed business advisers KPMG to advise on the sale of the 480-store retailer, which could fetch up to £400 million. 

Potential bidders for Card Factory include private equity firms Advent International and TPG. Interested parties are likely to receive full details of the assets up for sale later this week.

Founder Dean Hoyle owns a majority of the business, while Lloyds Development Capital owns about a 12 percent stake. According to sources a banking package is also being arranged to facilitate the sale.

Retail chains are seen as attractive targets for private equity because they are cash generative and are well-placed to benefit from any upturn in the consumer economy. Although it is assumed that the remainder of 2010 will be tough for consumers, high street sales are expected to bounce back in 2011.

The reason behind the sale could be Hoyle’s desire to focus more on his stewardship of League One football club, Huddersfield Town, to the top flight. In which case a management buyout by the current Card Factory team could also be on the cards.

Card Factory was founded in 1997 as a single store in Wakefield by husband and wife team, Dean and Janet Hoyle.  It now operates at 480 locations around the country and employs 4,000 members of staff.  It was rated by Fast Track as the 44th fastest growing business in the UK in 2006, and the 69th in 2007.  It is currently considered the 238th biggest, middle-market business in the UK.

"Card Factory had the guts to ahead with a simple price model and has done very well," said David Dean, managing director of Hambledon Studios.

Card Factory achieved sales of 168 million pounds in the year to the end of January 2009 and profits of around 29 million pounds, according to accounts filed with Companies House. It is expected to post earnings before interest, tax, depreciation and amortisation of about 50 million pounds this year, sources said. The company employs around 4,500 people Despite its success, the business has divided opinion in the greetings card market with rival retailers claiming that Card Factory’s value offer is having a detrimental effect on card buying. 

However, Card Factory has also earned praise for securing the jobs of 500 staff from the defunct Celebrations Group, which traded under the names of Cardfair and Card Warehouse.

 KPMG, Advent and TPG declined to comment. Card Factory was unavailable for comment.

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