DFS set to cut jobs up to 200 jobs as revenues fall due to the pandemic

The sofa chain, which employs 5,500 staff, said it is making a “targeted reduction” of roles amid an overhaul of the two brands.

The warning came as it said revenues slumped to around £725m in the year to June 28 after it was forced to freeze deliveries for most of its final quarter due to the coronavirus pandemic.

DFS said: “Reflecting the challenging outlook for our market, we are taking necessary actions to preserve our future competitiveness.

“We have commenced an operational restructuring of Sofa Workshop and Dwell to improve the returns generated by those brands.”

DFS said it expects pre-tax losses of between £56m and £58m for the year as a result of the delivery pause.

But the group said sales have bounced back strongly since stores reopened in May – soaring 69 per cent year on year.

“We believe this performance materially benefited from latent demand from customers that would otherwise have completed purchases in late March, April or May and, given the wider economic uncertainty, we remain cautious on the outlook for demand,” the group added.

It said online sales have remained strong even though stores are now open, up 77 per cent year on year from the start of the lockdown until July 12.

The restructuring across its Dwell and Sofa Workshop brands, which was first revealed in March, comes after the group furloughed 5,000 staff amid the lockdown.

It said this government support, together with the business rates holiday, only partly offset the “substantial losses that we have incurred due to the business suspension”.

Tim Stacey, the group’s chief executive, said: “The events of the past few months have brought the best out of our group, and I am very proud of our fantastic people who throughout this crisis have voluntarily supported the NHS, including delivering sofas to around 50 hospitals across the UK and manufacturing PPE in our factories for local hospital trusts.

“Our priority throughout the crisis has been to protect and support our people and our customers.

“With their support, and an even stronger sense of togetherness, we emerge with renewed energy and purpose.”

Mr Stacey added: “I also want to thank our many stakeholders for their firm support throughout this crisis from our shareholders, banks, supplier partners, our landlords, the Government and also the British Retail Consortium for their help and advice.

“Again, these relationships are stronger than ever, and we look forward to developing our group together.

“Our strong online platforms have served customers well throughout the lockdown and we have seen consistently high order intake, which I’m pleased to see has continued as our showrooms reopened.

“There is no doubt that consumer behaviours are changing fast and as such we are accelerating our omni-channel strategy through increased investment in technology right across the customer experience.”

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