DFS decision to target the more affluent customer is paying off

Ian Filby of DFS
Ian Filby of DFS
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Sofa giant DFS Furniture reported record annual results following a move into more aspirational designs that appeal to shoppers who previously saw the store as being too down-market.

A year ago 50 per cent of people looking to buy a sofa did not consider Doncaster-based DFS as an option, but this perception is gradually changing.

Recent tie-ups with upmarket magazines House Beautiful and Country Living as well as a range of French Connection sofas are paying off as more customers visit its stores.

The group’s advertising campaign, which focuses on the sofa as being the heart of the home rather than on price promotions, has appealed to DFS’s most important demographic – women.

Research by the firm suggests that it is women who nearly always have the final decision on the sofa.

Men are allowed to contribute, but women will decide.

DFS’s chief executive Ian Filby said: “Both our advertising and our product ranges appeal to all women, from the value seeker to the more aspirational. Both love the advertising.

“We’re getting very good feedback from customer tracking. We’ve really adopted a style that’s more feminine, broader in appeal and with a touch of humour. It’s about women building the heart of the home.”

At the same time as reaching out to more affluent customers who have shunned DFS before, the group is determined not to lose sight of its value for money roots.

Earnings rose five per cent to £86m in the year to July 27, when sales advanced 7.4 per cent to £670.8m.

The group didn’t break out like-for-like sales, but said it has enjoyed a prolonged period of underlying like-for-like growth.

However, the group warned that the hot weather over the summer hit footfall and orders, which will hit results in the first three months of the new year – traditionally the retailer’s quietest quarter.

“With the beautiful summer not that many people spent their weekends in store,” said Mr Filby, who believes that people have simply delayed their pur- chases.

“We should make it up. We’re confident that over the year it will all equalise.”

At a time when the market has seen double digit declines, Mr Filby said the group has performed well.

Following speculation that the group is poised for a £1bn stock market flotation, Mr Filby said private equity backer Advent International has no plans to re-list the company.

“There are no current plans to pull out at the moment. They are happy with their investment,” he said.

Lord Kirkham sold the business for £590m three years ago.

DFS opened a total of eight new stores during the year and has since added two in Aintree and Ipswich.

It expects to open between three and six stores a year from now on.

The ‘House Beautiful Collection’ and ‘Country Living Furniture’ ranges have been endorsed by the editors’ of both magazines – which both have high ABC1 readerships.

Susy Smith, the editor of Country Living, said: “DFS is the perfect retailer for our treasured designs. With their 40-year heritage, DFS values great design and quality furniture just as much as we do at Country Living.”

The Country Living collection, which includes The Loch Leven, St Ives and The Gower, was inspired by the British and Irish countryside.

The House Beautiful range is more European, with names like Casa Mila, The Bauhaus and Villa Savoye. The furniture is only available at DFS.

The group has invested £2m in training all of its employees as part of a major investment programme.

“When times are tough most retailers chip away at staff training,” said Mr Filby.

He said he was very encouraged by the group’s multi-million pound investment in the internet.

“We’re relaunching the site at the back end of the summer. We now have a really successful room and sofa planner. You can plan a specific room and drop the sofa in,” he said.

There is also a sofa and room planner app. Some 80 per cent of customers go online before coming into a store.

“People are much better informed. They do their homework beforehand.”

He estimated that very few people, less than 10 per cent, buy directly from the web without trying out the sofa.

“Most people are quite wise to sit in a product they are going to have to live with,” he said.