DFS cuts jobs and predicts loss of up to £58m
DFS FURNITURE
£1.13
17:35 18/04/24
DFS said it would cut jobs as the sofa retailer predicted an annual loss of up to £58m caused by the suspension of deliveries during the Covid-19 shutdown.
The company forecast a pretax loss of £56m-£58m for the year to the end of June after revenue fell £271m to about £725m. DFS said it records sales when a product is delivered to the customer, leading to the sharp fall in revenue because deliveries were on hold for much of the final quarter.
Online orders rose 77% between 23 March and 12 July from a year earlier as customers switched purchases online. After showrooms reopened from late May sales jumped 69% between 1 June and 12 July from a year earlier. DFS said it had a "particularly strong" opening order book for the financial year just started that will have a revenue benefit of about £100m.
DFS said the sales surge reflected pent-up demand and that it was cautious on the outlook because of wider economic uncertainty. It announced a restructuring of its Sofa Workshop and Dwell brands and said it would spend less than £2m on a "targeted reduction in headcount".
The company did not put a figure on job losses which are the latest in the retail sector after thousands of reductions were announced by John Lewis, Boots and other big names. Hopes of a rapid rebound for the economy were disappointed on Tuesday when official figures showed output rose just 1.8% in May, well below economists' forecasts.
DFS said: "Recent trading has been very strong, boosted by latent demand …Despite the benefit of this exceptional recent trading performance and ongoing government stimulus packages, we remain cautious on the outlook for the remainder of 2020 and into 2021."
The company's shares rose 1.7% to 157.65p at 09:04 BST.