Pent up sofa demand cushions DFS following lockdown profit slump
DFS reported huge losses as the coronavirus lockdown put its trading on pause, but said pent-up demand from shoppers keen to spend more on furnishings has helped it bounce back.
The sofa retailer posted a loss of £56.8m for the year to 28 June, compared to a profit of £28.2m the year before.
Revenues fell by £271.7m to £724.5m during the period, hit by the closure of all of the retailer’s stores during lockdown.
However the company said that its new financial year had started “very strongly”, with all stores reopened and its digital arms continuing to grow.
DFS, which also owns the Sofology brand, forecast an additional £226m of revenues for the current financial year, boosted by year-on-year growth in order intake and a higher opening order book.
“While the reported decline in profit is undoubtedly disappointing in headline financial terms, a significant proportion of this profit has already been recovered in the current year as we resumed customer deliveries,” said chief executive Tim Stacey.
Stacey said that the strong start to the new financial year was likely due to “a combination of pent up demand from lockdown, consumers spending relatively more on their homes and the strength of the DFS and Sofology propositions in particular”.
Shares in the retailer rose as much as 2.98 per cent in morning trading following the results.