Topps Tiles to shut 23 stores in cost-saving bid

(Sharecast News) - Topps Tiles announced plans to shut 23 underperforming stores on Wednesday as the tile specialist looks to save costs. The company said in a half-year trading update that total group revenue in the 26 weeks to 28 March dipped 0.1% year-on-year to £142.7m, having been impacted by volume loss from "the lengthy CMA process" in CTD. Topps bought the CTD Tiles brand in August 2024 following its collapse into administration.

Group revenue excluding CTD was 2.1% higher, although following a robust first quarter, revenue growth in the second quarter moderated slightly, the company said, but remained positive at 0.6%.

The business continues to outperform the wider market, which declined by about 2.5% over the equivalent half-year period, based on data from the Barclays UK Consumer Spend Report for Home Improvements & DIY.

Topps Tiles delivered like-for-like revenue growth of 0.1% in the first half.

Due to a softer home improvements and DIY market and to offset government and macro-driven cost inflation, Topps has begun rolling out a series of self-help measures "to continue driving sustainable profit growth in the medium term".

These include cost-saving interventions to increase efficiencies at head office and across the store portfolio, including the closure of 23 underperforming stores across the financial year. This is expected to reduce overall revenue but improve profitability through sales transference and cost reduction.

"Savings are expected to be weighted toward the second half of the year and will underpin in-year profit as well as provide sustainable profit improvement," it said.

Chief Executive Alex Jensen said: "Topps continues to outperform a softer market. In light of subdued consumer sentiment and geopolitical uncertainty as well as the cumulative impact of cost inflation, the management team is implementing a targeted programme of self-help measures weighted towards the second half.

"These actions are designed to support year on year profit growth and provide a stronger financial platform for 2027 and beyond."

At 0850 BST, the shares were down 3.6% at 33.36p.

Susannah Streeter, chief investment strategist at Wealth Club, said: "It's not a top day for Topps Tiles. Shares have dropped sharply after the extent of the company's problems became clear, forcing it to announce the closure of 23 stores this year. It's focusing on a small footprint of outlets which are more profitable, shrinking operations to become leaner and more efficient.

"However, the radical restructuring has unnerved investors, and the outlook looks tricky. Higher payroll costs aren't going away, freight costs are likely to rise amid higher energy costs, and household confidence has taken a battering. The DIY projects Topps Tiles relies on for a steady stream of revenues look set to shift lower on priority lists this year, as households grapple with a new cost-of-living crisis and put projects on hold."

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