DFS is going Dutch as sofa specialist looks to Europe

The Doncaster-based firm carried out extensive research and identified Holland as the most suitable country for expansion.

DFS chief executive Ian Filby said: “Holland was one of the strongest countries for us. It’s probably easier to get there than to Ireland.

“Also it’s quite a fragmented market and there is a strong promotional element. The Dutch are known for strong value.”

The store opening at Cruquius follows the group’s expansion into Ireland.

“Holland is three times the size of Ireland or Scotland. It would be easy to see a ten to 15-store chain in Holland,” said Mr Filby.

There are no plans to play on DFS’s British heritage.

“We’re not hiding from the fact we’re a British company, but we’re not coming in with a British flag,” said Mr Filby.

“The Dutch quite like home decor with English statements. They’re not massively pro-British, but they’re fairly positive towards us.”

He was speaking yesterday as DFS said it has “excellent prospects” following strong growth in annual sales and a recovery in profits.

The group said that the improvement in trading seen during the winter sale last December continued through to the end of the financial year on August 2.

It said gross sales in the second half grew by 6.6 per cent, delivering a 2.8 per cent increase in gross sales to £827.0m for the year to August 2.

Adjusted earnings in the second half showed a “satisfactory increase” of 8.1 per cent, making up the majority of the shortfall reported in the first half.

Sales were down in the first half following a hot summer and a very warm autumn when people put shopping trips on hold in order to enjoy the sunshine.

Full year adjusted EBITDA came in at £81.4m, down from £84.6m last year, after adding back non-recurring exceptional legal and professional expenses of £2.4m.

Mr Filby said the group is striving to broaden its appeal, enhance its customer service and make its products more accessible.

The group has launched a number of aspirational brands through its partnerships with Sofa Workshop and Dwell. DFS wants to appeal to more upmarket shoppers who previously considered the brand to be too down market and promotions driven.

Following three new store openings at Aintree, Ipswich and Torquay during the first half, the group said it reached the significant milestone of 100 DFS stores in the UK and Ireland.

“We plan to continue our retail expansion at the rate of three to five new stores per year, and have three new UK stores at York, Ayr and Basingstoke scheduled to open in the early part of the current financial year,” said Mr Filby.

Last year it launched a new website which is now delivering strong results.

“Like any re-platform we had a few tough months, but now we’ve got a web business that’s absolutely flying. We’re really pleased with the progress,” said Mr Filby

In addition to its brand partnerships with Sofa Workshop and Dwell, DFS has exclusive ranges of UK-made sofas under brand names such as Country Living, House Beautiful and French Connection. These achieved more than £60m of gross sales orders in the year.

Following a trial in the South-East, the group extended its Customer Distribution Centre concept into the North-West during the second half.