Despite many of its showrooms being shuttered by lockdown restrictions, DFS has posted a strong performance in its interim results for the 26 weeks to 27 December 2020.
It says it now expects its full year profits before tax to be around £105 million.
The furniture retailing giant achieved group revenue of £572.6 million, with total sales up 17.3 per cent year-on-year. While online sales soared by 66.2 per cent.
Over a quarter of revenues (25.7 per cent) came from digital during this time, an increase of 7.3 per cent.
A combination of long-term and continual investments in the firm’s online capabilities have enabled it to carry on taking orders throughout the pandemic. It is said to have benefited from ‘pent-up demand’ after the first lockdown and the growth in consumer spending on homeware categories, as people spent more on furnishing the homes they were spending more time in.
Not only is DFS over three times the size of its nearest competitor, it says – commanding over a third of market share (at around 36 per cent), it’s also, according to its research, taking the lead in online sector search traffic. It is now 2.5x ahead of its next nearest specialist competitor, with ‘DFS’ the most searched term for the sector ahead of ‘sofa’ and ‘sofas’ combined.
In its report, DFS outlined the strengths of its integrated retail model, which caters for both online and in-store shoppers.
For the growing number of consumers who are happy to transact entirely online, the retailer offers some 12,500 augmented reality sofa images to help them visualise the product in any room in their home. Customers can also now interact with showroom staff via live ‘in-store’ video links.
While for the vast majority of consumers who still want to visit showrooms themselves, to see, touch and sit on their prospective new sofa, DFS says it will continue to maintain ‘an attractive showroom estate, which benefits from regular refurbishments and technological enhancements’.
Tim Stacey, group chief executive officer at DFS, said: “This strong first half profit and cash flow performance is a true reflection of the supreme efforts put in by our teams right across the Group since the start of the pandemic.
“Our business has proven to be resilient throughout the period despite showroom closures and a significant amount of external disruption in our supply chains. The investments we’ve made in our digital channels have generated exceptional revenue growth.
“Consequently our order bank remains well above normal levels and, subject to showrooms reopening by 12 April 2020, our central planning scenario is for an expected full year profit before tax outcome of approximately £105m, with further benefits to be realised in next year’s financial results.
“We’re committed to our strategy to lead sofa retailing in the digital age with our proven integrated retail model.
“We expect to see a good level of activity in the home market as Covid-19 restrictions ease and, having accelerated the execution of our strategy and grown our market share, we are well set for future growth.”
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