DFS yesterday hailed an “improving trend” in its performance and said it continued to gain market share after stepping up its expansion in the third quarter of the year.
The sofa retailer, which runs 91 stores in the UK, reported a 21 per cent fall in underlying earnings to £44.5m in the nine months to 28 April.
Despite the slump in profits, DFS said its 12 store openings this year in places including Tottenham Court Road and Old Kent Road in London, were expected to add to profitability in the final quarter of the year.
“We will also continue to benefit from our increased UK manufacturing capacity and improved marketing efficiency”, chief executive Ian Filby said. “Despite the difficult trading environment for the retail sector, we expect to deliver a robust result for the year.”
Sales fell eight per cent in the period to £446.8m compared with £486m in 2011. However this was a slight improvement on the 10 per cent decline in the first half.
DFS said that costs relating to the launch of new stores reduced earnings by £3.1m during the first nine months.
It also booked a further £500,000 cost after expanding its UK manufacturing capacity and shifting more of its production to two factories in south Yorkshire and Derbyshire. Filby said DFS is creating 500 new retailing and manufacturing jobs in the UK via its expansion.