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DFS continues to expand despite fall in profit

Sofa retailer DFS has reported that underlying profits fell 31% to £28.3 million in the half year to 28 January. While sales fell 11% to £296.8 million in the 26 week period, there was a slight improvement in the second quarter which the company hopes will continue.

GENERAL MERCHANDISE

DFS continues to expand despite fall in profit

Sofa retailer DFS has reported that underlying profits fell 31% to £28.3 million in the half year to 28 January. While sales fell 11% to £296.8 million in the 26 week period, there was a slight improvement in the second quarter which the company hopes will continue.

The Doncaster based business, which opened eight stores in the first six months of the year, said it was on track to open at least 12 stores this financial year. The company has also increased production at its factories in Carcroft in south Yorkshire and at Long Eaton in Derbyshire. The expansion will create 500 new jobs.

DFS chief executive Ian Filby said: "We have continued our programme of substantial investment in the future of DFS, opening eight new stores during the first half and significantly expanding our UK manufacturing capacity. We plan to open at least 12 stores in total by the end of our financial year. Our expansion will create in total 500 new British retail and manufacturing jobs."

The retailer said that pre-opening and launch costs of the eight new stores had reduced earnings by £2.6 million during the first half. DFS also incurred a £500,000 expense relating to the increased production at the factories where it added extra shifts.

"This investment in production is designed to improve our efficiency, increase margins and enhance customer service by shortening delivery lead times on a growing part of our product range," added Filby.

Filby said the UK retail trading environment "remained challenging".

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