SOFA giant DFS reported weak demand and said it expects no early improvement in trading conditions.
The Doncaster-based based group said that despite the gloomy environment it believes it has the right strategy, proposition and team to manage the business through these tough conditions.
In a trading update for the 13 weeks to October 29, DFS said sales fell from £150m to £128m.
Earnings were down from £15.2m last year to £8.7m after a £2m programme to fund retail and manufacturing expansion.
DFS chief executive Ian Filby said: “This has been a period of heavy investment in the future of DFS, with the successful opening of seven new stores and a significant expansion of our UK manufacturing capability, together creating 200 new jobs with a further 300 planned.”
The group opened five stores during the first quarter, at Huddersfield, High Wycombe, Hereford, Colne and Old Kent Road at a cost of £1.6m.
DFS said customer orders at the new stores were ahead of expectations, but they made no contribution to sales in the 13 week period because of the lead time between order and delivery.