Furniture Village reports sixth consecutive year of growth

The furniture retailers’ sales were up 1.2% to £265.2m – its sixth year of consecutive growth – during the 52 weeks to March 2019. The furniture chain posted EBITDA of £5.6m up £1.4m compared with the same period the previous year.

Despite tough trading conditions and weak consumer confidence due to Brexit, Furniture Village improved its operating profit by £1.5m compared with a loss the previous year, which it attributed to £10m of cost savings due to lower costs from new and revamped stores.

After opening 12 new stores in the two-and-a-half-years to December 2017, the retailer paused any new store openings during the period in “anticipation of the impact of Brexit” would have on consumer confidence, the housing market and the wider economy.

Furniture Village finance director Claire Shiels said: “The ongoing political and Brexit related uncertainty continues, with consumer confidence remaining understandably subdued, particularly in relation to big-ticket items and major purchases.

“That said, we have taken significant steps over the past year to protect the business against these downward pressures and we will continue to ensure that we positively influence all these factors within our control going forward.”

GlobalData senior retail analyst Matt Walton said: ”Being more tactical with discounting has also helped strengthen its gross margin and cash position, which have both been under greater pressure from the depreciation of sterling and rising raw material prices and have both declined in the last two financial years.

”Furniture Village is also aiming to drive more regular footfall with the rollout of Carpetright concessions into five of its stores before Christmas 2019.

”This partnership is mutually beneficial as, despite Carpetright’s recent struggles, it has high brand awareness and should benefit from the gradual recovery in housing transactions in 2020 helping to boost footfall. These concessions are reflective of Furniture Village’s long term view, which along with its prudent cost management and focus on conversion, will help it steer through 2020.’’