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Sales floored at Floors 2 Go
Archived article dated Saturday June 25th 2005
Consumers avoiding home improvement spending
The sharp consumer downturn has stalled sales at Floors 2 Go, further evidence of a falling away of spending on home improvements in the current tough retail market.
Floors 2 Go, the UK's largest specialist retailer of laminate and wooden flooring, warned in April that spending was slowing. It has now said that like-for-like sales are likely to be 20 per cent down on the second quarter of last year, compared to a 2.6 per cent decline in the first quarter.
The company said the fall in sales was caused by a general down turn in discretionary household expenditure, warning that overall trading conditions remain challenging "and if like-for-like sales continue at these rates, operating profits are likely to be materially lower than last year's level."The company said gross margins have continued to improve and it is "continuing to introduce a number of initiatives to further improve margins and reduce costs".
A new warehouse launched earlier this year has enabled the company to reduce stock levels, while new product ranges will be introduced in the third quarter for the start of the peak trading period. Floors 2 Go will open six new stores in Northern Ireland during August, with the target of 25 new stores in 2005 still on track.
Simon Farnsworth, CEO, Floors 2 Go said: "So far 2005 has been difficult for retailers overall and coupled with a disappointing May Bank Holiday trading period, has meant that our sales have been impacted more greatly than anticipated.
"However, whilst it is difficult to predict how positive the key summer season will be for sales, we are confident that with our new stores and improvements we have made throughout our business, we are well placed to benefit from any uplift in consumer spending.
"The laminate and wooden flooring market is still undeveloped compared with the rest of Europe and has great potential - our aim is to continue to offer the widest product range in the market at competitive prices to attract customers.
"We remain focused on improving cost efficiencies and investing to sustain long-term growth and improved returns for shareholders."
Floors 2 Go has been through a period of strong growth in both stores and sales. In the year to the end of December, it reported turnover up 78.3 per cent to £78.8m, with like-for-likes up 22.9 per cent. In March, it ended talks with a potential bidder after failing to agree on a price that the board believed reflected "the true value of the business".
Tagged as: Floors 2 Go
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