DFS to cut jobs as revenues slide

DFS has revealed that revenues were down by £271m in the year ended 28 June 2020, largely due to the pause in deliveries following the nationwide lockdown. 

In light of the “challenging outlook” for its current market, the group has now commenced an operational restructuring of Sofa Workshop and Dwell that will see it go ahead with a “targeted reduction in headcount”. 

It comes as its profit before tax is expected to be in the range of a £56m to £58m loss in its full-year results.

Until lockdown, the group had been performing in line with expectations, with order intake up in the second half year-on-year.  

The group also welcomed “accelerated” online trading throughout both the lockdown period, and since showrooms reopened, with online order intake up 77% year-on-year from 23 March to 12 July.

Operations across all showrooms, manufacturing and distribution have now resumed, and following re-opening, order intake in showrooms has been “markedly above prior year comparatives”, with a year-on-year growth of 69% between 1 June and 12 July.

In addition, the group confirmed it has a “particularly strong” opening order book for the next financial year, which is expected to generate an incremental revenue benefit of around £100m. 

The retailer said this “strong” recent trading was boosted by latent demand, which it was “able to capture” as a result of an ongoing investment in its online offering, as well as the “prompt” resumption of showroom operations.  

Tim Stacey, group CEO, said: “The events of the past few months have brought the best out of our group, and I am very proud of our fantastic people who throughout this crisis have voluntarily supported the NHS, including delivering sofas to around 50 hospitals across the UK and manufacturing PPE in our factories for local hospital trusts.

“I also want to thank our many stakeholders for their firm support throughout this crisis from our shareholders, banks, supplier partners, our landlords, the Government and also the British Retail Consortium for their help and advice.”

He added: “Our strong online platforms have served customers well throughout the lockdown and we have seen consistently high order intake, which I’m pleased to see has continued as our showrooms reopened. 

“There is no doubt that consumer behaviours are changing fast and as such we are accelerating our omni-channel strategy through increased investment in technology right across the customer experience.”