DFS sales soar as people splash out on new sofas during lockdown

DFS Furniture has reported a leap in sales as more people spend their cash on home improvements rather than holidays, dining out and other leisure activities amid the pandemic.

During extended lockdowns, many homeowners have decided to buy new sofas

During extended lockdowns, many homeowners have decided to buy new sofas and furniture as they spend so much more time at home.

The Doncaster-based firm said gross sales jumped 19 per cent in the 24 weeks to December 13 and its order book is strong, providing future resilience.

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The group said its strong performance reflects the benefit of a shift in spending to home categories, and also market share gains, leading to particularly strong order intake in the first quarter and a resilient second quarter to date, despite extensive showroom closures in November.

Following Government guidelines, manufacturing and deliveries are continuing through current Tier 4 restrictions, although showroom activities are currently closed in Tier 4 areas of England. They are also closed in Wales and the Netherlands.

Gross sales through the firm's online channels leapt 76 per cent as more people turn to online shopping during the pandemic.

Subject to the extent of enforced showroom closures and based upon cautious order intake assumptions, DFS expects its annual pre-tax profits to be in the upper half of market forecasts.

DFS is acting in accordance with Government guidelines to restrict the spread of Covid‐19. Out of its estate of 212 showrooms, 52 showrooms in Tier 4 areas in England, all its seven showrooms in Wales and the six Netherlands showrooms are currently closed in line with Government guidance.

Showrooms in other areas are currently open and its retail websites, manufacturing sites and delivery operationsare operational nationally as has been the case throughout the first half.

The group said sales have risen despite ongoing disruption at The Port of Felixstowe and raw materials supply issues, relating principally to foam availability in Europe.

DFS said it is gaining market share and benefiting from a shift in consumer spending towards the home.

The group said it is monitoring the status of Brexit discussions and it has made preparations in case of a no trade deal between the UK and European Union.

In considering the impact of the UK exiting the EU, DFS said it is important to note that under WTO terms, there are no tariffs applicable to upholstered finished goods. The firm said it has prudently planned for the risk of an exacerbation of current port congestion and delays and it is grateful for the patience that customers have shown in the face of currently extended fulfilment lead times.

Tim Stacey, group chief executive of DFS, said: "I want to thank every colleague in our group for their resilience, spirit and determination to overcome the many and varied operational challenges that we have faced since reopening our business after the first lockdown.

"We are working all hours focusing on what we can control to look after our people and our customers. I want to thank our customers for their patience given the ongoing disruption to our deliveries due to port congestion and raw material shortages, as well as apologise to those that have experienced delays.

"While the current environment is clearly unpredictable, our business model is resilient and we are well set for medium term growth."