DFS to move into Europe
The news comes as the retailer announced that its second half gross sales grew by 6.6% while adjusted EBITDA increased by 8.1% to make up the majority of the shortfall reported in the first half.
This means that in the 53 weeks to 2 August adjusted EBITDA was £81.4 million compared to £84.6 million in the prior year while gross sales grew to £827 million from £804.3 million previously.
During the year, DFS opened three new stores to reach the significant milestone of 100 stores in the UK and Ireland. It is now planning to open three to five new stores per year, and has three stores in York, Ayr and Basingstoke scheduled to open in the early part of the current financial year.
The retailer is also planning to launch its first trial of the DFS concept in Continental Europe with the opening of a new store at Cruquius in The Netherlands later in 2014.
Following a successful trial in South East England, the retailer has extended its customer distribution centre concept into the North West. DFS said pooling its stores’ warehouse and distribution operations in this way has created additional selling space in existing stores, thereby enabling it to sell an extended range of products and reduce the cost of its warehouse space. It is now considering extending the concept across its national estate over the next few years.
DFS said its new website is delivering good results and had contributed to the improved performance in the second half.
The retailer continued to expand its product range and develop its offer for more aspirational customers through brand partnerships with Sofa Workshop and Dwell in the period. Both these businesses are now wholly owned by DFS Furniture Holdings and their results will be consolidated from the beginning of the 2014/15 financial year.
DFS said the partnerships have built on the success it has already achieved with its exclusive ranges of high quality sofas handcrafted in the UK under brands such as Country Living, House Beautiful and French Connection.
Ian Filby, DFS chief executive, said: “I am pleased to report continued momentum in our second half results. As we anticipated in our third quarter report, the significantly improved trading that began with the launch of our Winter Sale in December continued through to the end of the financial year.
“During the year we have made good progress in the implementation of our strategy, which seeks to build on DFS’s well-established strengths as one of the UK’s best-known brands, a major British manufacturer and the country’s leading retailer of upholstered furniture.
“Our strategy remains focused on broadening our appeal, enhancing our service and making our products more accessible to our customers than ever before.”
DFS has also announced the appointment of former John Lewis managing director and former Pets at Home chairman Luke Mayhew as a non-executive director. Filby said Mayhew’s wealth of experience would be important in guiding growth strategy and enhancing corporate governance.
Looking ahead Filby added: “The improved trading momentum of the second half has continued in the current year to date, and we remain confident that DFS has excellent prospects to deliver long term profitable growth and total shareholder return as the UK market leader in upholstered furniture.”
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