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DFS sales fall by £270m due to lockdown

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
LONDON, UNITED KINGDOM - 2020/05/28: DFS Furniture and sofa store seen in London. UK Government has announced a further relaxing of restrictions that resulted from the COVID-19 pandemic. Thousands of non-essential shops, department stores and shopping centres can open from June 15. (Photo by Keith Mayhew/SOPA Images/LightRocket via Getty Images)
DFS Furniture and sofa store in London. Photo: Keith Mayhew/SOPA/LightRocket via Getty Images

Sales at sofa retailer DFS (DFS.L) fell by £270m ($338m) due to the strict UK lockdown introduced in March, the company said on Tuesday.

DFS said revenues in the 52 weeks to 28 June were £271m lower than the prior 12 months, blaming the COVID-19 lockdown. Total sales were £725m in the period.

DFS was forced to pause deliveries in March due to restrictions introduced by the government and the company furloughed 5,000 members of staff.

The sales slump means DFS expects to make a loss of £56m to £58m for its financial year, excluding restructuring costs.

However, sales have surged since showrooms reopened in June. Orders placed between 1 June and 12 July were 69% higher than the same period last year, DFS said.

Customers have also flocking to its website, with a 77% rise in online sales since the lockdown began.

“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,” chief executive Tim Stacey said in a statement.

“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.”

DFS noted the economy remains “weak” in the UK but said it has “historically prospered in economic downturns and gained market share.”

The company announced plans to restructure its brands Dwell and Sofa Workshop, including cutting an unspecified number of jobs. The restructure is expected to cost up to £18m.

Greg Lawless and Clive Black, retail analysts at stockbroker Shore Capital, wrote in a note sent to clients on Tuesday: “Amidst a changing retail landscape we see DFS as a survivor with an opportunity to win market share as weaker competitors exit the furniture market.”

Shares in DFS rose 2.4%.