Sofa specialist DFS is to open 12 new stores this year creating 500 jobs despite a fall in half year sales and profits.
The Doncaster-based group said sales fell 11 per cent to £296.8m in the six months to January 28 while earnings fell 31 per cent to £28.3m.
DFS chief executive Ian Filby said business picked up in the second quarter from the first quarter and the trend is continuing to improve in the third quarter.
“We’re feeling positive, but we’re not looking at 2012 as a recovery year,” said Mr Filby.
“We have a recovery plan that is based in 2012 being as bad as last year. We’ve built a plan that says there will be no recovery this year.”
DFS said sales were down in the first half as fewer people bought new sofas.
“Higher ticket items were hit, whether it was electrical or furniture,” said Mr Filby.
He added that DFS gained market share last year but the overall market was down.
The pre-opening and launch costs of the eight new stores reduced earnings by £2.6m during the first half.
There was a further £500,000 expense associated with the expansion of the group’s UK manufacturing capacity by adding additional production shifts at two factories in Carcroft in south Yorkshire and at Long Eaton in Derbyshire.
The expansion plans will include the opening of the first DFS store in Dublin this Easter and a new store in Sheffield.
The group has bought back £15.6m of bonds and paid a dividend to shareholders, at a combined cash cost of £28m.