NEWS

JOHN LEWIS H1 SHAPED BY CUTS

In its unaudited results for H1 (ended 31st July 2021), John Lewis Partnership said it had been forced to take “difficult but necessary decisions to reduce costs and improve competitiveness” at the start of its five-year plan to return the business to a sustainable profit of £400m a year.

During the period, eight John Lewis stores were closed, and the consultation on the closure of an associated delivery hub is ongoing. The number of head office roles were reduced, and there are plans to have fewer managers in John Lewis, says partner and chairman, Sharon White: “This has been painful for the partnership. 80% of affected partners have found new roles in the partnership in the half, while retraining support has been available to partners to secure work outside. We are also creating new jobs – a total of 500 next year to operate our new warehouse at Fenny Lock.”

H1 profit before exceptional items was £69m – up £124m on 2020/21, when the partnership made a loss of £55m. Compared to the first half of 2019/20 when the business made a loss of £52m, profit is up £121m. The business made savings of £66m, and received business rates relief of £58m.

The partnership had exceptional costs of £98m in the half, due to property costs totaling £24m – principally to settle lease obligations arising from store closures – and redundancy costs of £54m. Including these exceptional items, the partnership made a loss before tax of £29m – a significant improvement on last year’s loss before tax of £635m.

Underpinning the growth in profit was a +6% increase in sales across the partnership. John Lewis saw strong sales growth in the first half, up +12% on last year (+13% LFL). Almost 75% of sales were made online in H1, broadly the same as last year.

Growth was strong in Home (up +23%), yet margins remained subdued as sales in lowermargin categories remained higher than before the pandemic, and inflationary pressures in global freight pushed up costs. The retailer launched ANYDAY, a new own-brand which offers “style and value for money”, and has been its most successful own-brand launch ever for a spring season, delivering £56m of sales in the half.

Sharon says that the retailer’s focus for H2 will be execution of the partnership plan, including expanding areas dedicated to John Lewis within Waitrose to approximately 40 shops by early 2022.

FURNITURE VILLAGE LAUNCHES HELPLINE TO TACKLE SLEEP PROBLEMS

Furniture Village has partnered with The Sleep Charity to launch the UK’s first dedicated helpline for people who struggle to sleep. The National Sleep Helpline will be operated by specialist, trained advisors between 7pm-9pm five days a week, Sunday to Thursday. The team will provide callers with tips and advice so they can identify appropriate strategies, directing them to other organisations and services for specialist or long-term support.

The launch follows a survey of 2000 UK adults conducted by OnePoll, which looked at the consequences of a bad night’s sleep. Results showed that more than a quarter (28%) said it had affected their mental health. This figure rose to 50% for those aged 18-24.

Lisa Artis, deputy CEO of The Sleep Charity, says: “It’s clear that the great British public is in the midst of a sleep crisis which is affecting national mental health, work performance and even leading to alcohol misuse. Almost 60% of those surveyed felt that there was a lack of support for their sleep issues, which is why we have partnered with Furniture Village to set up the UK’s first National Sleep Helpline. Together we want to ensure that everyone has access to high-quality, evidence-based advice, regardless of age, ethnicity, background or income.”

The helpline can be reached on 03303 530541.

RECORD RESULTS AND SUCCESSION PLANNING AT JYSK

Worldwide, JYSK achieved a record-breaking €4.386b in turnover in its 2020/21 financial year (ended 31st August 2021). It achieved a turnover of €69.2m in the UK and Ireland, demonstrating +67% sales growth YoY.

“I am very pleased that we have been able to increase turnover by +7% despite the fact that our stores have been temporarily closed in almost all markets,” says president and CEO, Jan Bøgh.

Online sales increased by +43% (accounting for 28.6% of the UK’s total sales), in addition to JYSK’s Click & Collect results, and the retailer’s customer base grew by 230,000 YoY, with significant growth in new territories such as Ireland and Belgium. JYSK ended the period with 3085 stores – up 136 YoY.

Jan has taken up the new position of president and CEO of Lars Larsen Group Retail, to focus on retail companies across the group and opportunities for acquisitions. Rami Jensen will take over as group president and CEO on 1st September 2023. Heal’s has opened a new 7500ft2 outlet store in Walton-on-Thames, Surrey, offering returned and overstocked pieces at significantly reduced prices, as well as establishing a presence in Fenwick (Newcastle)

The BFM will present three webinars in the coming months, on the following topics: doing business with the EU and NI post-Brexit (6th October); business’ insurance needs (19th October); and social media channels, strategy and content (11th November)

Geko Products, based in Nottinghamshire, has acquired home and giftware supplier Scarthingwell Replicas. Geko has launched a new Scarthingwell website to run alongside its existing offer, and Scarthingwell’s trade showroom has now moved to Geko’s head office

CIFF Shanghai, which was scheduled to run in September, has been postponed until 11-14th December, 2021

The Cotswold Company

has appointed Lynsey Dorman as art director, to ensure brand positioning and purpose are present across all visual assets and content

SATRA’s Phil Reynolds has been appointed chair of the British Standards Institute (BSI) technical committee FW/6 ‘Flammability performance and fire tests for furniture’

Handy has reached an agreement to acquire the non-zip related assets and sales from Aero Zip, as that company’s founder, Will Evans, plans to retire

The BFM Fabric Show

London will return in 2022. The two-day event will take place in the week commencing 7th March 2022, back in the West Stand of Chelsea FC

The Furniture Makers’

Company’s free-toattend webinar series returns this autumn, starting with ‘Targeting carbon reduction – expectations for the furnishing industry’ on 14th October at 11am, covering carbon reduction initiatives, the value of eco-design and commercial viability of circularity

Wayfair has appointed Dr Jens Uwe Intat as its head of Europe, replacing Martin Reiter. Jens Uwe joins with a 30-year track record of scaling leading ecommerce businesses, including Amazon Germany and Electronic Arts

Harrison Spinks’

commercial director Ruairi Giles is taking part in the 2021 Virgin Money London Marathon this month, and hopes to raise £5000 for industry charity The Furniture Makers’ Company as part of its Step 2 It campaign

Shabby Store, a West Yorkshire-based etailer, has rebranded itself Shabby, launching a new website and branding, and unveiling greater online functionality

Silentnight Beds has been awarded the Manufacturing Guild Mark by The Furniture Makers’ Company, in recognition of its role as “an exemplar of the UK furnishing industry”, highlighting its laudable sustainable journey in particular

PROFITS UP AS DFS ADAPTS TO NEW NORMAL

In its preliminary results for the 52 weeks ended 27th June 2021, DFS states that it saw revenue from continuing operations grow by £94.1m (or +9.7% compared to the non-Covid disrupted pro-forma FY19 period) as it leveraged its scale, operating experience and longstanding relationships to accelerate its make-to-order deliveries rate.

Growth in new orders was significantly stronger than revenue growth, and was driven by market share gains, pent-up demand and a shift in consumer spending, leading to a high closing order bank that will be recognised through H1 FY22.

Online revenues were up +184.3% YoY, with record underlying profit (before tax, excluding brand amortisation) achieved of £105.8m (£99.2m on a reported basis). DFS also realised a significant reduction in net bank debt, and established a new three-year agreement for a £225m ESG-linked senior revolving credit facility.

Strong consumer demand continued over the first 12 weeks of FY22, with the current order bank at a record high, states DFS.

Group CEO Tim Stacey says: “Despite numerous operational challenges during the pandemic, I’m proud that we have remained focused on our strategic agenda to lead sofa retailing in the digital age, and are on track to achieve the incremental £40m of profit benefits set out in 2018. As we enter a new financial year, the group is very well positioned to build on its market leadership position in sofa retailing and to target further growth as we invest to strengthen our business platforms and extend our retail proposition into adjacent product categories.”

During the period, the retailer made £9m of incremental efficiency savings across its property and marketing platforms. It opened five new Sofology showrooms, with eight openings planned in FY22, and integrated Dwell into the brand operating structure, creating a competitive fulfilment solution for DFS’ extended homewares offer.

It also launched 15 upholstered bed ranges through the DFS brand, with “positive” early results, and strengthened its commercial beds partnerships, “driving the opportunity to gain share in the £5b+ bed and non-upholstery living room market”.

NBF ANNOUNCES 2021 BED INDUSTRY AWARD WINNERS

Six bed businesses, from a shortlist of finalists chosen by an independent panel of judges, celebrated as they scooped the top accolades at the NBF’s Bed Show Gala Dinner in Telford ast month.

This year’s winners were: Shire Beds for Bed Product of the Year; John Cotton Non-Wovens for Component Product of the Year; Hypnos for the Sustainability Award; Dreams for National Bed Retailer of the Year; Mattress Online for Online Bed Retailer of the Year; and Sussex Beds for NBF Retail Champion of the Year.

After a year’s break, the Bed Industry Awards returned to Telford International Centre, hosted by comic and writer, Jo Caulfield, and was attended by more than 350 industry guests. The awards, now in their 11th year, recognise bed manufacturers, suppliers and retailers representing the best in inspiration, design, growth and innovation.

“The annual awards are industry-renowned for recognising the standout companies in the bed sector,” says NBF president David Moffitt. “In a year of change, we congratulate all those who put themselves forward to be judged, and celebrate all the brilliant finalists and award winners.”

See next month’s issue for more on the show, plus a celebration of the award winners.

FOAM PRODUCER ACQUIRES UK MATTRESS MANUFACTURER

The Vita Group, one of Europe’s leading providers of flexible polyurethane foam, has acquired mattress manufacturer Usleep from Northedge Capital LLP.

Usleep produces a portfolio of foam, spring and hybrid mattresses for some of the UK’s leading mattress retailers and bed-in-a-box brands. Usleep’s two sites in Ashton under Lyne and Castle Donington utilise state-of-the-art machinery to create one of the UK’s most efficient automated mattress production processes.

This is the third acquisition completed by Vita in 2021, following the acquisitions of IMPE, located in Naples, Italy, in Q1, and the UK-based Technical Foam Services (TFS) in Q2. Vita says the Usleep acquisition significantly enhances and accelerates its strategy to grow its bedding business across Europe. Vita has existing mattress production facilities in France, Germany, Romania, The Netherlands, the UK and Hungary, plus a range of global partners in the bedding sector, building on R&D capabilities via its innovation centres in the UK (bedding) and Lithuania (chemistry/formulation).

Ian Robb, CEO of The Vita Group, says: “This acquisition will enable collaboration on innovation across the end-to-end service, from unique foam technologies through to innovative mattress design.”

BRINGING FABRIC TO LIFE

The 28th edition of Proposte, which took place from 7-9th September, attracted over 2700 visitors, of which more than 60% came from outside Italy. Belgium, France, Germany and Spain were the countries best represented, with a consistent number of British and US visitors, too.

“We are highly satisfied with the results obtained,” says Piercarlo Viganò, Proposte’s president. “At the stands you could tangibly feel the enthusiasm and the desire to do business in person. Everyone was doing what had been most missed these last months – touching fabrics and looking into each other’s eyes.” Proposte has now moved online as

Photograph by Donatella Simonetti

Fiera Smart 365, which aims to offer all Proposte exhibitors a virtual window until next year’s fair – taking place from 5-7th April.

DEMAND DRIVES PROFIT GROWTH AT DUNELM

In its preliminary results for the financial year ended 26th June 2021, Dunelm cites “very strong sales growth” of +26% (against 21% in 2019), despite its stores being closed to customers for more than a third of the year. Dunelm says it made significant market share gains (up +1.6% pts to 9.1%), and achieved active customer growth of +8.5%, driven by strong growth across its digital channels. Digital sales grew by +115%. Profit before tax stood at £157.8m, (+45%).

CEO Nick Wilkinson comments: “We are emerging from the pandemic as a stronger and better business, having transitioned from being a physical retailer with digital aspirations to being a proven, digital-first, multichannel retailer.”

Dunelm also plans to develop its homewares and furniture proposition by “raising the bar on range development”, stating: “We are adapting our mix of good/better/best price points and the size of our promotional buys. We are now using online customer insight to increase choice and fill in gaps in those categories that we know are more frequently shopped. We will continue to extend our range in new and developing categories, such as Decorate, Outdoor Lighting and Sofas & Chairs. Additionally, we will introduce new collections and sub-brands created by our in-house designers.

“We are committed to introducing more sustainable products and are building capability to accelerate the introduction of new materials and circular sourcing into the design and manufacturing process. We will also be broadening our sustainable The Edited Life range to more categories, following the launch of our made-to-order sofa range (made from recycled materials, and designed for longevity with a 25-year guarantee).

“We will also improve the range of furniture available for quick delivery and grow the geographic coverage of our own home delivery network. This will be enabled by our new furniture warehouse (in Northamptonshire) as well as investments into supporting supply chain and transport systems. We will also be extending customer support hours and offering shorter response times.”

Dunelm expects this year’s profit before tax to be modestly ahead of the top analyst expectations.

MADE SEES MARGINS ERODED DESPITE REVENUE GROWTH IN H1

Made has reported record results for the six months to 30th June 2021, achieving +61% revenue growth (£171m). A strong trading performance delivered £214m in gross sales for H1 2021 (+54% growth YoY). Adjusted EBITDA was £1.1m (+£12.2m YoY).

However, gross margin was down to 48.7%, due to global freight inflationary pressures and foreign exchange headwinds. Reported losses before tax were -£10.1m, including one-off IPO-related P&L charges of £5.4m – compared to a loss of £15.2m for the same period in 2020. Made’s active customer base grew by +34% over the six-month period, with an AOV at £244 (+12% YoY). The UK delivered gross sales growth of +55% YoY, while Made’s continental European markets grew gross sales by +53%.

CEO Philippe Chainieux says: “Following on from our successful IPO in June, I am pleased to report a record first half performance. We have continued to see strong and sustained consumer demand for our exclusive, design-led products, and have gained significant market share with growth in all eight of our markets. Thanks to our agile business model and supplier relationships, we are well positioned to navigate the industry-wide global supply chain disruption, which is expected to continue into the first half of next year.”

Made’s product range grew to more than 8000 SKUs, and is set to expand with the addition of a “curated marketplace”, offering “third-party artisan brands”. The group nearly doubled the size of its UK large goods warehouse, and signed a letter of intent to extend its existing warehousing space in Antwerp. TCM Living’s (Alstons, Ashley Manor, AMX Design and Alexander & James) CEO Mark Smith is to step down on 31st December 2021, following over 20 years with the group.He will be succeeded by current CFO, Jonathan Fearn

Harrison Spinks has appointed Scott Hollis as its first US-based sales manager, with the specific task of helping the business venture into North America

Dow Polyurethanes

and Orrion Chemicals Orgaform, together with Eco-mobilier, H&S Anlagentechnik and The Vita Group, have inaugurated a pioneering mattress recycling plant in France as part of the RENUVA circular economy programme

Silentnight has developed a new ad campaign, ‘Wake Up to a Silentnight’, which aims to communicate that seven out 10 people are “sleeping on the wrong mattress”

Moda Furnishings

reports that its garden furniture retail operation has doubled in size in the past year, and has seen furniture sales increase by over +60% YoY

JYSK has announced the rollout of six new stores in Ireland by the end of 2021 – in Ashbourne, Carlow, Tralee, Eastgate, Limerick and Dundalk

Julian Charles, bedding and linen retailer, has recovered to a breakeven position after experiencing a £2.1m EBITDA loss in the 18-month period to October 2020