Sofas retailer ScS has bounced back into the black after focusing on widening its appeal, improving customer service and tight control of costs.

The retailer revealed pre-tax profits of ÂŁ1.8m in the year to July 31, 2010, compared with a pre-tax loss of ÂŁ6.6m the year before.

The 97-store group clocked up a 16% uplift in total sales to ÂŁ194m. Like-for-likes surged 14.8% despite a punishing big-ticket environment.

However, trade has slowed since the year end. Chief executive David Knight said that after a “very strong” autumn and January Sale period against tough comparatives, trade softened in February and March. Knight said the slowdown was in line with forecasts, which assumed flat like-for-likes up to the end of March.

Knight said that last year ScS benefited from its ‘pay £10 a month’ promotion as well as the “continued financial support and substantial retail expertise” of owner Sun European Partners, which bought it out of administration in 2008.

After making redundancies in the 2009 financial year to cut costs, Knight said the focus last year had been “very much about growing the top line without increasing costs”.

Knight said: “We continue to remain focused on offering great value and developing our product offer to appeal to as broad a customer base as possible. With regard to the overall picture, consumer confidence is going to remain difficult and I believe this year is going to be very challenging.”

The retailer has attracted new customers with the introduction of more upmarket brands La-Z-Boy and G Plan since the year end.

Knight said that ScS’s online business was a “major area” of development but would take time to mature given the high ticket nature of its offer. He added that ScS customers still preferred to touch and feel products. The retailer aims to open five stores this year but Knight has said there are 20 locations on his “wish list”.

 

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