Park could benefit from credit crunch’

Apr 5 2008 by Alex Turner, Liverpool Daily Post

BIRKENHEAD-based Christmas savings club Park Group believes it can benefit from the credit crunch as it recovers from the effects of the Farepak crisis.

It reported improved sales figures yesterday with Christmas orders 17% ahead of the same time last year. The number of savers and agents has also increased, which the company attributes in part to a recent advertising campaign.

The sector struggled in the aftermath of the high-profile collapse of Farepak before Christmas 2006 which caused 150,000 customers to lose £40m.

Park, an Alternative Investment Market-listed company, saw more than one in three of its customers desert the company and the number of agents, who co-ordinate neighbourhood sales, also fell.

It now has more than 400,000 customers, although it is still has a long way to go to return to its 2006 levels.

Group finance director Martin Stewart said: “I think customer confidence has returned this year. With the credit crunch there is a real move to people managing their money better.

“We offer a good value savings plan and an easy way to manage a difficult time of the year.”

Park is also pleased with the benefits from ongoing investment in its online services. It has taken on extra web development staff and 29% of the total order value now been placed by agents is through the online systems.

Mr Stewart said: “The business has invested quite heavily in web-based infrastructure and technologies so we can process customers’ transactions much more cheaply than we were.

“It has significantly improved customer service for our agents.”

The group, which makes the majority of its money during the festive season, added that annual profits would be in line with market expectations.

Yesterday’s trading update, for the year to March 31, is the first to cover a Christmas season operating under new trust arrangements.

A trade body was launched, the Christmas Pre-payments Association, to monitor the industry and a scheme which saw payments ring-fenced and placed into an independently-controlled trust was set up.

“The signs are encouraging,” said Mr Stewart.

“Park is a well-known heavily respected name and people will have more confidence in that.”

alex.turner