DFS demand boosts UK factories

RETAILER DFS has delivered a vote of confidence in UK manufacturing as it revealed that more than half of its sofas are made in Britain.
Ian Filby of DFSIan Filby of DFS
Ian Filby of DFS

Ian Filby, chief executive, told the Yorkshire Post that manufacturing in the UK allows the make-to-order business to respond quicker to customer demands.

“I also just think that UK manufacturing has made itself more competitive in recent years,” he said.

Hide Ad
Hide Ad

“You can source product that has good lead-in times from factories that are well run with people who are well motivated to work hard and earn good money.”

He said DFS’ main factory, in Carcroft, near Doncaster, has added 120 skilled jobs in the last 18 months. It now employs nearly 300 people.

With its other two factories in Alfreton and Long Eaton in Derbyshire, DFS employs 800 people in UK manufacturing jobs.

The Doncaster-based business has substantially increased its UK production since 2010, when private equity firm Advent took it private in a £500m deal. At the time, a fifth of DFS sofas were made in Britain.

Hide Ad
Hide Ad

The company introduced double shifts at its three UK factories last year, increasing UK production to 30 per cent of sales. With UK suppliers accounting for an another 17 per cent, DFS said more than half of its sofas are now made in Britain.

The retailer yesterday reported sales of £481.8m in the nine months to April 27, an increase of 7.8 per cent on the same period last year.

It said earnings before interest, tax, debt and amortisation rose 8.5 per cent to £48.3m.

DFS remains highly cash generative, said Mr Filby, with cash balances at the end of the third quarter at £15.4m after expenditure on bond refinancing and shareholder dividends totalling £36.9m.

Hide Ad
Hide Ad

The retailer invested £2.5m in expansion, which saw the opening of five new stores in the third quarter at locations in Thanet, Eastbourne, Bristol, Dudley and Stockton.

Like-for-like sales were not specified, but represented “low growth” and remained steady over the last five quarters, said Mr Filby, who echoed the retail industry view that “flat is the new good” in like for like comparisons.

Nevertheless, he described the retailer’s performance as “robust”, which underlined the strength of the brand, the success of his strategy to broaden appeal, enhance customer service and make products more accessible through new openings and multi-channel sales.

DFS spends around £100m on advertising a year to strengthen its brand and now has a market share of around 27 per cent, towering over its nearest rival at 7 per cent, said Mr Filby.