Q&A: 'We've upped our game on product development to drive the top line', says Topps Tiles boss Matt Williams

Retail Week: Profits fell but still beat expectations. How did the first half go from your perspective?

Matt Williams: We moved sales forward but the most damage was done in the second quarter, against a pretty decent first quarter. Current trading has been a continuation of the second quarter. It’s largely as a result of consumer confidence. We sell a highly discretionary good. But it’s a market beating performance, largely due to a new customer seeking more inspiration.

Why did consumer confidence deteriorate in the half?

MW: It’s difficult to isolate. News flow can be challenging to consumers, they recognise bad news when they hear it. 

Is the new inspiration-seeking trend a short term one or will it last?

MW: We don’t see it as a short term trend. We’re doing everything we can to capitalise on it. Some of our self help initiatives are in and around this exact point. It’s not just about cost savings, we’re driving the top line too with new product development.

We’ve stepped up our game in installing new ranges and refreshing ranges. On average we’re bringing in a new range a week. 

What other self-help initiatives are you employing?

MW: We’re pushing promotions a little harder. And elements of the lab store we’re rolling out across all stores, such as the Inspiration Station.

Can you give more detail on the cost saving initiatives?

Rob Parker: We’re saving £2m in operational costs. £1m will come from stores, through absorbing natural wastage, trimming hours, and not replacing leavers. In the central functions we’re [saving another £1m by] cancelling discretionary activities and making staff savings.

Will Topps Tiles be employing fewer people than it was a year ago then?

RB: There will be a reduction in head count but relatively small. We can be flexible, some of it is about delaying recruitment.

Will improvements in the housing market feed through to Topps Tiles figures soon?

MW: If it is sustained it won’t do us any harm whatsoever. It shouldn’t be underestimated the affect it has on consumer confidence, seeing their house prices go up, that could give us a boost.

What’s your outlook on the year?

MW: I expect [the second half] to be in line with what we’re experiencing at the moment.  We can see like-for-like trading remaining where it is now for the rest of the year and still hit our targets in terms of analysts [adjusted pretax profit] expectations of £12.5m.

But we’re gunning for more than that. And we’re continuing to invest in the business for the longer term.