SOFA retailer DFS Furniture bucked the high street trend yesterday with a rise in first quarter results in what it described as a challenging trading environment.
The Doncaster-based group said sales rose by 4.2 per cent in the 13 weeks to October 30. Strong cash generation continues with cash balances increasing from 7.0m to 22.3m since the end of July.
DFS's chief executive Ian Filby said: "DFS has delivered solid results in what has remained a challenging trading environment.
"Despite adverse exchange rate movements and a rise in the cost of our interest-free credit offer, these results are ahead of our targets."
The group is building a pipeline of new stores as part of a "measured" roll-out programme that will add around 20 new stores to the portfolio over the next three years, with the first of these new stores opening in Dundee on Boxing Day.
DFS reported a one per cent rise in earnings to 15.2m for the 13 weeks to October 30.
A reduction in average lead times to delivery has helped to offset the marginally smaller order bank carried forward from last year.
The group said that business since the end of October has continued in line with the first quarter, up to the period of recent adverse weather conditions.
The severe weather has hit retailers across the country, although DFS did not say how its sales have been affected.
DFS was sold to private equity group Advent International, owner of the Poundland stores, last April for 500m.
It was thought that DFS founder Lord Kirkham might take the company public again after going private in 2004, but then Advent made its move.
DFS has capitalised on the demise of rivals such as Sofa Workshop and Land of Leather.
In the year to the end of July, DFS sales surged 13 per cent to 653m with adjusted earnings rising 10.6 per cent to 71.8m.
DFS, which makes some of its own sofas, said it grew market share to more than 20 per cent following the struggles of competitors which also include SCS Upholstery and Pier.
"In tough times, people, particularly if they're going to pay a deposit, want to put their money in a company they can trust," said chairman Richard Baker.
DFS operates from 74 sofa stores and five dining furniture stores across the UK, employing more than 3,000 staff.
Mr Baker, the former chief executive of Alliance Boots, joined Advent as an operating partner in August 2009, assuming the role of DFS chairman at the time of its acquisition in April.
Following a refinancing in July, which raised 240m via a seven-year senior secured note issue, DFS recently opened sites in Bradford and Inverness.
With each new store employing around 25 staff, Mr Baker said DFS expects to add around 500 extra staff over the next three years.