Covid-19: ScS reports strong post-lockdown trading due to pent-up demand

Sofas, carpets, and floorings retailer ScS said today (30 July) that bookings were down year-on-year in the 12 months to 25 July, but it offered an encouraging outlook on the early part of its new financial year due to “pent-up demand”.

In a trading update ahead of announcing its full preliminary results in September, the retailer said post-lockdown trading has been “very strong both in-store and online”, with orders increasing by 92.2% year-on-year.

“This reflects pent up demand, which has been supported by our well executed re-opening plans, our continued focus on value and customer service, and our increased investment in targeted marketing over the last two months,” it stated.

Delivered sales for the 52 weeks ended 25 July were £268 million, compared to £333 million one year before, with the reduction said to be driven by the temporary store and distribution closure from late March to late May due to the coronavirus crisis.

The company said, as its furniture products are made to order and normally have lead times ranging from five to 13 weeks, the recent strong order intake bodes well for a significantly better start to this financial year than last. This is because the majority of these orders will be delivered in the first quarter of the next fiscal year.

It has been a unique trading year due to the Covid-19 outbreak, and ScS opted to break down its performance in a different way to usual to reflect the impact of the pandemic on its business.

Pre-lockdown, covering the 34 weeks to 1 March, order intake was down 4.2% year-on-year. During lockdown in the eight weeks to 23 May order intake plummeted by 92.5%, but in the eight weeks after reopening – from 24 May to 25 July – orders increased by 92.2%.

For the full year, order intake was down by 5.9%, contributing to the £65 million in drop in delivered sales compared to 2019.

“Whilst it is too early to provide clarity on the outlook for the weeks and months ahead, the group is encouraged with its trading performance since re-opening on 23 May 2020,” ScS said.

“ScS is a resilient business, with a strong balance sheet, coupled with a flexible cost base, and is well positioned to navigate these difficult circumstances and maximise opportunities as and when they arise.”