Market conditions impact sofa group sales

Upholstery group Sofa Brands International has released its annual figures across its four key divisions, Parker Knoll, Duresta, G Plan and The Lounge Co.

For the year ended 30 June 2019, Parker Knoll saw total sales grow 0.4% to £32.5m from £32.4m in 2018, while overall income resulted at £2.1m, down 12.4% compared to £2.4m.

UK sales rose 0.6% to £29.7m, while EU sales represented just over £1m, up by 2.7%. Non-EU sales slipped 70% to £13,000.

In its report, Parker Knoll said it had invested in a new distribution fleet across the East Midlands, which is expected to reduce distribution costs moving forward.

Duresta experienced a slight dip in sales by 9% to £13m from £14.3m, while its income of £129,000 recorded last year fell to a loss of just over £1m.

UK sales declined 7.1% to £11m, with export sales also down by 23.6% due to non-European – particularly in China and Japan, representing a fall of 42.2%.

The company said that the reduction in sales was attributed to low consumer confidence in the luxury end of the market.

Furthermore, it added that it underwent a restructuring exercise in manufacturing and administration, which resulted in an exceptional cost of £257,000, and is expected to reduce costs moving forward.

G Plan also saw sales fall 6% to £35.9m from £38.3m, while total income resulted at £893,000, down from £2.4m the previous year.

UK sales, its primary market, slipped 6.5% to £33m, while EU sales fell 35% to £92,000. Outside the EU saw sales represent £18,500.

The company said that the lull in sales was mainly in multiples and department store sectors due to suffering from poor market conditions.

Finally, The Lounge Co reported a growth in sales by 18% to £3.5m from £3m in its third year of trading, as well as reducing its loss from £1.9m to £1.8m year-on-year.

Within its report, it said that the business is on track to break even by 2020-21, with losses expected to be halved in the coming year.

It added that marketing spend continued as the brand establishes itself in the online market, with a focus on the South East of England showing ‘promising results’.

Overall, combined revenue for all four businesses resulted at £84.9m, 3.5% down from £88m recorded the previous year.