DFS records full year loss but encouraged by recent trading

DFS has reported a revenue reduction of £271.7 million in the year ending 28 June 2020, which it said was caused by the pause in trading during the Covid-19 crisis. The furniture retailer suffered a pre-tax loss of £56.8 million as a result of this drop in sales.

The retailer said it was encouraged by its performance since the start of the new financial year however, which it puts down to continued growth in its digital channels and reopened showrooms.

In July, DFS revealed that online orders grew 77% year-on-year for the period 23 March to 12 July, and in this new trading update, stated that its year-on-year order intake growth over the last 12 weeks combined with its opening order book predicts it will achieve £226 million in additional revenues in the current financial year.

The retailer added it will now “focus on digital and showroom investment to drive DFS omnichannel” as well as on new product development.

It is also accelerating the roll out of Sofology stores, with three new showrooms opened this year and six to 10 sites targeted for FY21.

Tim Stacey, group chief executive officer at DFS commented: “While the reported decline in profit is undoubtedly disappointing in headline financial terms, a significant proportion of this profit has already been recovered in the current year as we resumed customer deliveries. 

“The current year has started very strongly with all showrooms now open and our digital channels continuing to grow. We believe that this growth is due to a combination of pent up demand from lockdown, consumers spending relatively more on their homes and the strength of the DFS and Sofology propositions in particular.”

In recent months, a number of other homeware brands have reported strong sales amid the ongoing Covid-19 pandemic, including Dunelm and Cox & Cox.