Summer heatwave hits DFS sales

Sofa specialist DFS Furniture said the exceptionally hot weather has hit sales, especially over key trading weekends.
DFS' Joules rangeDFS' Joules range
DFS' Joules range

As people flock to the coast in search of escape from the sweltering temperatures, consumers have put on hold their plans to buy a new sofa.

During the fourth quarter to date, the Doncaster-based group reported "significantly lower than expected" order intake.

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The firm has also been hit by disruption to ships bringing made-to-order products from the Far East, which it said was outside of its control.

Within the core DFS business, like-for-like sales fell 3 per cent during the 23 weeks to July 7 and were 4 per cent lower during the 49 weeks to July 7.

DFS said cost flexibility and cuts in discretionary costs have provided some mitigation to the recent trading environment. However, it expects annual earnings to fall below last year's £82m, reflecting the timing of the arrival of products from the Far East.

The group said it expects the furniture retail market will remain challenging over the next 12 months, given reduced consumer confidence levels. However, it expects some alleviation of current short term demand effects.

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DFS said its investment in the supply chain and the recent acquisition of Sofology, together with progress expected at Dwell and Sofa Workshop, will provide benefits to earnings that should help to mitigate the challenging sales environment.

The group has historically capitalised on adverse trading conditions to build its market position.

In a trading update the group said: "We continue to believe that our cash generation and long-term growth prospects will drive attractive returns for our shareholders."

Prior to the heatwave, the group said it saw positive like-for-like order intake, ahead of its expectations, across the third quarter of the financial year.

The group will announce its full year results on October 4.

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Earlier this year, ​​DFS ​said its long standing chief executive Ian Filby ​is to​ retire after eight years at the helm and will be succeeded by ​c​hief ​o​perating ​officer Tim Stacey.​ ​

​Mr Filby will step down as ​chief executive and from the board of directors on October 31.

DFS said​ ​Tim Stacey will take over as CEO on November 1 following a six month handover period to ensure a smooth transition.

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