DFS sitting pretty after tripling profits

FURNITURE retailer DFS has nearly tripled its pretax profits after a year in which it undertook a successful IPO.

The firm, which employs 3,500 people, reported pretax profits of £10.7m for the year to 1 August 2015, compared to £3.6m the year before.

Revenues for the Doncaster-based retailer, founded by Lord Kirkham, increased by £60m to £913m for the year.

DFS opened five major stores in the UK and Ireland during the year, as well as successfully trialling its small store concept, though it did say that the upholstery market was 20% behind pre-recession, 2007 levels.

The flotation was an “exciting milestone” for the group, and the firm also had a win in a legal battle against Wigan-based rival Sofaworks over brand names during the year.

DFS chairman Richard Baker said: “The group’s growth strategy is delivering positive results across multiple initiatives and there are still substantial further potential opportunities for DFS in both the UK and international markets under our current strategy.

“With the key macroeconomic indicators for the upholstery sector all positive and our strategic initiatives on track, we can look to the future with confidence.

“We have an exceptionally strong management team, a leading customer proposition, a financial model that is well adapted for the volatility in demand that the sector can experience, and a proven long-term growth strategy.”

More recently, the firm has come under fire from the Advertising Standards Authority for a “misleading” advert.

The ASA said that the retailer had not substantiated that pre-sale prices were genuine retail prices for the products and that the savings claims in the television adverts were misleading.

A statement from the ASA said: “The ads must not appear again in the form complained of.

“We told DFS Trading Ltd that when making savings claims they should ensure that ‘was’ prices reflected genuine retail prices, and that they held evidence to demonstrate that was the case.”