House of Fraser cannot cushion sofa chain’s fall
SCS GROUP, the sofa chain that listed on the London stock market last month, reported widening losses in the first half of the year blaming costs relating to the launch of its House of Fraser concessions.
Pre-tax losses for the 26 weeks to 24 January rose to £13.1m from a £2.54m loss the same time last year. However, total sales rose 14.5 per cent to £132m and the group’s order intake increased by 7.2 per cent on a like-for-like basis.
The furniture retailer began operating concessions in 30 House of Fraser stores in July last year helping the group to appeal to a broader demographic of customers.
“House of Fraser is a real premium department store. This is a long term investment for us and we always knew it would take a number of seasons for it to be established,” ScS chief executive David Knight told Morning Wire
The group, which sells a number of upholstered furniture brands through its 97 standalone stores, moved into flooring two years ago, which Knight said has also helped to broaden its appeal and attract more repeat customers. Its sales order intake, which reflect sales it has not yet booked, rose 13 per cent in the first half.
“We have now captured two per cent of a £17bn market from a standing start two years ago, ” Knight said.
Shares in ScS, which floated at 175p a share, fell 5.4 per cent yesterday to 207p. The group, which makes 55 per cent of sales in the second half, said it is still on track to hit full-year targets.