Resilient Topps Tiles suffers heavy sales fall but remains profitable

27th May 2009 | tiles | Like for like sales dropped 18.5% for Topps Tiles in the half year to 28th March – and 13.4% overall to £92.1m. The floor and wall tile chain also suffered a drop in gross margin but managed to return a £10.3m operating profit, a 50% fall on last year.

Gross margins were severely impacted by the weak pound. Unlike the furniture and carpets sector, where retailers can turn to UK manufacturers to negate unfavourable exchange rates, the tile industry supply chain is centred on Eurozone countries including Spain and Italy, as well as suppliers further afield in China, Brazil and Turkey.

Topps Tiles said the removal of credit insurance to a number of its key suppliers earlier this year had not had a material affect on the business, with all suppliers continuing to work with the chain.