DFS suffers £30m revenue dip ahead of coronavirus footfall concerns

A UK furniture retailer has reported today that its revenue for the first half of this financial year was down by nearly £30m.

DFS, which owns furniture brands such as Sofology and Sofa Workshop, saw a 5.7 per cent revenue dip from £517.6m last year to £488m, decreasing by £29.6m.

It said that the decrease was due to a ‘challenging’ environment, and that it had experienced ‘systems disruption’ in Sofa Workshop, contributing a loss of £4m to £5m.

It also speculated that it could see further complications in the coming months due to the COVID-19 outbreak, commenting that it had seen a decrease in customer footfall in recent weeks.

However, the company’s online sales grew by 4.5 per cent, up to £117m from £112m.

Tim Stacey, CEO of DFS, commented: “Despite the challenging retail environment, and excluding some isolated systems disruption in Sofa Workshop, our performance over the first half has been as expected, given the exceptional prior year comparative driven by latent demand.

“In particular we have seen a good performance by the DFS brand in driving conversion and margins and continued online sales growth.

“Trading in the second half for the group has also started satisfactorily with performance in the DFS brand particularly encouraging, with order intake growth year-on-year and good gross margins.

“However, given the uncertainty as to how the current COVID-19 situation will develop it is not possible to give guidance with any certainty for the full-year out-turn.

“At present we believe our supply chain position should normalise before the financial year end, and it is only in very recent days that we have observed any change in consumer footfall to our showrooms.

“While any disruption to order intake over the key trading periods of Easter and the May Bank Holidays is likely to impact our financial year 2020 results, it is reasonable to believe this may ultimately be transitory in nature; following periods of subdued demand we typically see much of that latent demand returning.

“Notwithstanding the uncertain short-term outlook, we remain confident in the group’s financial strength and relative track record of performance in all environments.

“Furthermore, we believe our leading market position will allow us to drive long term attractive value creation for our shareholders.”