DONCASTER-based sofa giant DFS has reported weak demand during its first quarter and said it expects no early improvement in trading conditions.
The business, based in Carcroft, said despite the gloomy environment it believes it has the right strategy and team to get the business through the tough trading conditions.
In an update for the 13 weeks to October 29, DFS said sales fell 14 per cent, down from £150 million to £128m.
Underlying profits fell 43 per cent to £8.7m, partly as a result of spending on the group’s expansion plans.
The group has carried out a £2m programme to fund retail and manufacturing expansion.
Despite the fall in profits DFS, which operates 82 stores, said it will press ahead with its future growth plans – creating 300 jobs in the coming months.
The company said it will open three new outlets by next July, which along with its ongoing investment in expanding its activities at three manufacturing sites in Nottingham, means it is on course to create 300 jobs on top of the 200 it has added in recent months.
DFS chief executive Ian Filby said: “This has been a period of heavy investment in the future of DFS, with the successful opening of seven new stores and a significant expansion of our UK manufacturing capability.”
The group opened five new stores during the first quarter, at Huddersfield, High Wycombe, Hereford, Colne and Old Kent Road at a cost of £1.6m.
DFS said customer orders at the new stores are ahead of expectations, but they made no contribution to sales in the 13-week period because of the lead time between order and delivery. The group said it was on track to open a total of ten stores during the current financial year.