DFS defies the high street gloom with eight more stores planned

The Rotherham-based group, which operates 80 stores, said sales excluding VAT were down 0.7 per cent to £486m in the nine months to April 30, reflecting a “softening in overall consumer spending” in 2011.

But underlying profits rose 3.1 per cent to £56.2m as it maintained its profit margins and achieved marketing efficienc- ies.

The sales figures represent a slowdown on the previous half-year but the group said it has grown its share of the furniture market, which is being hit as anxious consumers delay spending on all but essential products.

DFS said it will press ahead with its store opening plans and has bought eight more sites, which will open over the next two years. A spokeswoman declined to say yesterday where these new stores will be located.

This leaves the group on target to open 20 new stores by July 2013. It has already opened a store in Dundee on Boxing Day.

DFS has previously said it hoped to benefit from the slump in the housing market as consumers bought more furniture as part of a trend to “improve not move”.

Growing internet sales have also boosted the group’s performance.

In a statement, Ian Filby, chief executive, said: “Although trading conditions remain exceptionally demanding for all UK retailers, we were fully prepared for that outcome in our plans for the year, and our good performance to date reflects our tight focus on the areas within management’s control.

“We have successfully managed our margin and costs, and maximised cash generation, while building a strong platform for our new store rollout programme.

“We have also continued to build on our well-established brand leadership and driven our market share by continuing to offer an outstanding proposition and excellent service to our customers, and by further developing our growing online proposition.

“These priorities will remain the focus in the final quarter of the year.”

Lord Graham Kirkham, the adopted son of a miner, founded DFS in a former billiard hall in Doncaster 40 years ago.

He went on to float the business in 1993 before taking it private in 2004 for £507m.

Lord Kirkham sold DFS to private equity firm Advent International in April 2010 in a deal believed to be worth around £500m.

Rich list researchers estimate that he is worth £1bn.

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