Lockdown wishlists and pent-up demand boost furniture retailer DFS
Months under lockdown had many Brits dreaming up furniture wishlists and room makeovers, and that’s now pushing order revenues higher at sofa retailer DFS.
DFS said year-on-year order intake growth over the last six weeks is equivalent to around £70m in revenues and well-ahead of its initial expectations.
The sofa retailer said this was on top of its previously announced strong opening order book that now generate a further revenues of £100m.
Shares surged more than 13 per cent at the open, changing hands for as much as 170p.
The announcement from DFS could be evidence of economic green shoots, after it was forced to cut jobs in restructure last month after year-on-year reveneues sunk by £450m.
The cuts will take place at subsidiaries Dwell and Sofa Workshop
The retailer put the order book jump down to the increased time most people have been spending in their homes, pent-up demand as well as its online-and-showroom model “particularly relevant in this consumer environment”.
Peel Hunt analysts said: “DFS is probably £100m ahead of where it is expected to be in sales … Customers are turning up in good numbers … and they are not being shy with AOV (average order value) either.”
However, DFS said that in some cases consumers could simply be bringing forward the purchase of some large items ahead of the next stage of Brexit or a worsening of the economic situation due to Covid-19.
That made further trading predictions, beyond the short-term, near impossible, DFS said.
Regardless, the retailer said this expectation-beating period of trading since the end of lockdown has “significantly strengthened financial headroom”.