Sofa chain’s sales dip blamed on early Christmas shopping
SOFA chain ScS blamed a wave of early Christmas shopping after reporting a sharp fall in sales.
The retailer said trading had been strong in the summer and early autumn.
But it revealed business had taken a turn for the worse over the past seven weeks, with fewer people coming into stores and spending less. “This appears to be driven by a change in behaviour with consumers shopping earlier for Christmas compared with previous years,” it said.
ScS added that customers were also being impacted by longer than usual times to get products.
Over the whole of the past 16 weeks, orders were up 0.9 per cent compared with two years ago. But they were down 10.6 per cent on the same time last year, when sales were fuelled by “an unprecedented period of pent-up demand”.
The company’s order book stood at £131.9million on November 20, £71.5million above the same point two years ago. Bosses said they were liaising with suppliers “to mitigate current supply chain challenges”. It is also working with UK suppliers to reduce order times.
ScS said: “We believe our continued focus on a promotional, value-led proposition will remain attractive to our target market and the board looks forward to the future with continued confidence.” However, investors were spooked by the update, with its shares falling sharply to an eight-month low yesterday, although they are up around six per cent in the year to date. Analyst Darren Shirley, from broker Shore Capital, said: “After a stellar period of trading through the various stages of Covid 19 restrictions, and easings, ScS has reported a step-back in trading momentum. We await to see if the slower trading is temporary, reflective of a change in Christmas shopping patterns, or of a more permanent basis.”
ScS was founded in 1894 and has become one of the UK’s leading sofa and carpet specialists with nearly 100 branches and over 1,500 staff.