DFS bid to attract upmarket shoppers paying off

The Doncaster-based firm is broadening its appeal to more upmarket shoppers who previously considered the brand to be too down-market and promotions driven.

DFS reported a six per cent jump in third quarter sales, lifting total sales for the year to date by 1.1 per cent to £487.3m.

The firm, which recently opened its 100th store, said it has seen a significant uplift in trading as consumers feel increasingly confident about the future.

CEO Ian Filby said: “We’re pleased with the progress since the winter sales.

“There are indications of health in the market and we’re positive about consumer confidence remaining stronger.

“It’s not a strong wind of recovery, but the environment is more positive.

“If people are feeling more positive about their long-term security, they have more confidence to invest in products like ours.”

Earnings in the three months to April 26 rose five per cent, but were down from £48.3m to £41.8m in the nine months to April 26 as a result of weak autumn trading when balmy weather deterred customers from shopping.

Weak footfall and trading last year led to a 24 per cent tumble in earnings to £23.8m in the half year to January 25.

Mr Filby said the group has developed its offer for more aspirational customers through its brand partnerships with Sofa Workshop and Dwell, the contemporary furniture and home accessories retailer.

“This builds on the success we have already achieved through the launch of exclusive ranges of high quality sofas handcrafted in the UK under the Country Living, House Beautiful and French Connection brands,” he said.

“Our strategy is focused on developing exclusive products through brand partnerships that will enable us to appeal to a larger and broader set of customers.”

The group reported strong cash generation with cash balances of £40.7m after payment of a £20.0m dividend to shareholders during the first quarter.

The firm said it is well placed to provide further cash returns to stakeholders in the medium term. DFS said its new website delivered good results and the group is consolidating its market leader position in online upholstered furniture sales.

The group reported good trading over the important Easter period and said it is confident of delivering a satisfactory result for the full year.

“All consumers are looking for great value. The winners are the ones that provide good value at all prices,” said Mr Filby.

Following a successful trial in south east England, DFS said it will extend its Local Distribution Centre concept into the North West.

“This involves pooling our stores’ warehouse and distribution operations to create additional selling space in existing stores, allowing us to sell an extended range of products and reducing the cost of our warehouse space,” said Mr Filby.