LONDON (ShareCast) - (Sharecast News) - Greeting card and gift retailer Card Factory said on Thursday that it had entered the US market after acquiring Garven for $25m (£19.6m).
Based in Minnesota, Garven is a wholesaler of gifts and celebration essentials trading as Garven Design and Cadence Packaging.

Card Factory said the deal is in line with its growth plan, accelerating its partnerships strategy in one of its key international target markets.

It marks the company's physical entry into the US gifts and celebration essentials market, which represents the biggest market globally at around £70bn.

Card Factory said Garven has an established customer base of general and speciality retailers which will allow the group "to further explore design and buying synergies, alongside opportunities to introduce its own ranges into the US wholesale market".

Chief operating officer Anne Schulze and chief financial Officer Walter Jungbauer will continue to manage the Garven business.

The company also said on Thursday that trading in the second half to date has been in line with its expectations and it has been "encouraged" by the start of the Christmas season. Its expectations for the full year are unchanged, albeit it has yet to trade through the peak Christmas trading period.

Chief executive Darcy Willson-Rymer said: "The acquisition of Garven is an important strategic milestone in our partnerships strategy. Together with our separate wholesale supply agreement covering over 1,100 stores across the US, it establishes a physical presence in the US market.

"Over a number of years, Garven has built a reputation as a trusted brand known for its quality products and impressive design capabilities, with Anne and Walter building an excellent customer proposition. We are excited to welcome the Garven team to Card factory and look forward to building upon their existing commercial relationships, as well as forging new ones.

"International partnerships are a key component of our growth strategy. This acquisition is a key step in delivering the growth from partnerships as we guided at our capital markets update in May last year. Garven represents an exciting opportunity for Card Factory to build scale in the world's biggest celebration occasions market."

At 1000 GMT, the shares were up 8% at 97.60p.

Dan Coatsworth, investment analyst at AJ Bell, said: "It's the next step in Card Factory's efforts to diversify its income stream beyond the sale of cheap greetings cards.

"Its UK stores have slowly given more shelf space to items like balloons and teddy bears, and now there is an opportunity to learn more about this market from an established US player. It will also open doors to potential design and buying synergies across the group."

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