Greeting Card Association 2014 AGM Report

Gifts & Greetings Review was pleased to attend the Annual General Meeting of the Greeting Card Association, of which we became one of the first Associate Members last year.

The meeting was held on Monday September 29 at the superb location of the National Space Centre in Leicester, where GCA president Chris Houfe presented his report on the year just gone and a succession of industry leaders shared their thoughts and insights on the wonderful world of greetings.

Chris asserted that the main challenge for the industry is “getting our message out to the public,” and referred to the inaugural National Thinking of You week as part of the ongoing campaign to do just that. Chris said he was “extremely proud of the new occasion” and “confident this event will grow over the years.”

He added that ongoing work needs to be done with schools in order to get the younger generation on board with our national passion for greeting cards.

Going on to introduce market statistics for 2013 (the latest available), Chris shared the heartening news that there has been year-on-year growth in the total value of single card sales*, which rose from £1,223.3mn in 2012 to £1,289.9mn in 2013. Of this total, £1,022.2mn came from sales of everyday cards, £130mn from Christmas and £137.7mn from Spring Seasons.

While sales grew in terms of value, however, there was a slight shrinkage in volume, down to £885.6mn from £894mn in 2012. £713.1mn everyday cards were sold last year compared with £721.6mn the year before and £87.8mn Christmas cards against £91.2mn in 2012, although there was an increase in the volume of Spring Season cards sent – £84.6 mn this year, up from £81.1mn in 2012.

GCA Secretary Sharon Little continued to share positive news with the large audience, saying that the 40 new Associate Members meant the GCA was more relevant to the wider industry and would help keep cards in the public eye. She thanked everyone for their help in making the first National Thinking of You Week a success and reminded everyone about Festive Friday – the last Friday in November – when the greetings industry unites once again to kick-start Christmas card sending.

Sharon also welcomed two new members to the GCA Council – Rachel Hare of Bellybutton Design and Sarah Porter of My World. Existing Council members include:

President: Chris Houfe of The Great British Card Company now enters the second year of his tenure as president. The Vice President is Ged Mace of The Art File, Secretary is Robin Bradley of Phoenix Trading and Treasurer is Jeremy Corner of Blue Eyed Sun. Joining them are Amanda Fergusson of Caroline Gardner, Steve Wright of Hallmark, Jayne Myers of Paper Rose, Bill Greeno of Quitting Hollywood, Ceri Stirland of UK Greetings and Paul Woodmansterne of Woodmansterne Publications.

After Ged Mace had presented the accounts, Cardzone’s Paul Taylor gave an interesting account of the career trajectory that took him from working in his family newsagents to owning a specialist multiple retail operation trading from 80 stores around the UK.

Admitting that retailers in this market are spoilt for choice when it comes to suppliers, Paul said he was “very fortunate that the industry has so many exceptional publishers to choose from” and “very keen to support smaller, niche publishers in select stores.”

He also highlighted the challenges faced by independent retailers in today’s hyper-competitive, multi-channel market, pointing out that specialists continue to “lose market share to Clinton’s and Card Factory.” He observed that Card Factory’s continued growth is now predominantly via secondary locations, which is “having a massive impact on independents,” while the Simply Clinton’s concept – just launched in Redhill – is another potential threat.

Garden Centres, on the other hand, are “more capable of holding higher price points” than other types of outlets, while boutique gift shops can also afford to be higher end in a lot of cases. The online market, Paul continued saying, “will grow driven by personalisation”, while he can only see “retail price points in cards and gifts being pushed down.”

The meeting was then rounded off by a rare treat in the form of ‘3 wise men’ – industry grand-daddies Duncan Spence (owner of Ling Design, shareholder in Carte Blanche Group and Moonpig investor), Simon Elvin (owner of Simon Elvin) and Peter Reichwald (owner of the Great British Card Company) – being interviewed by another of its most well-known entrepreneurs, Carte Blanche owner Stephen Haines.

Giving them just a gentle grilling with quite a lot of teasing on the side, Stephen coaxed his subjects into sharing the fascinating stories of their early careers, routes to success and insights into the industry today. One of the key questions was around value cards and whether the industry has only “come down to price”, with Peter admitting that he got into greetings “because the margins were so good” and was “amazed how long that lasted,” saying he was “surprised a Card Factory didn’t come along sooner.”

Those margins have of course collapsed in recent years, with Simon Elvin saying that while “Card Factory used to be a very big customer we used to argue with them over prices”. This became a particular problem – and ultimately untenable – when Card Factory spread out from its north of England base and set up in competition with Simon Elvin’s other customers in the south of the country. “We had to stop dealing with them,” Simon added.

“Independents,” he said, “can compete on personal service,” and while the advantages they have over Card Factory “aren’t many, you have to try.”

Duncan said he believed “the industry and retail as we know it will continue to change dramatically,” and the publishers who really want to survive and flourish will have to keep up with that pace of change and in particular “embrace the internet.” He also said it was important to “surround yourself by the right people”.

Simon’s tips for survival included “hard work, common sense, dedication, enthusiasm” and great product. Strong distribution was also highlighted as a key factor, critical to the success of American Greetings and UK Greetings, which were earlier described by Paul Taylor as “monopolising the market.”

Peter added that publishers need to find the right suppliers and look after them well, while “managing cash flow” was also seen as vital, “service is survival” and print runs have to be effectively managed if profits are to be maximised – or even obtained at all on today’s super-tight margins.

Aside from number of funny anecdotes from the irreverent Mr Haines that are perhaps better left unreported, the meeting was rounded off by an enjoyable networking lunch and a trip around the Space Centre for a peep at the moon rock! Look out for more updates in the coming weeks.