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Strong online growth at ScS contributes to first-half revenue growth

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ScS today reported online sales up by a quarter in the first half of its financial year. The retailer said footfall was down as a result of Covid-19, and warned of the potential impact of the pandemic on both delivery and demand

Online sales of £9.8m were up by 24.5% in the first half compared to the same period last year, and accounted for 6.1% of total sales. Some 93.9% of ScS sales – by value – are completed in store. 

While sales were slightly up across all channels, like-for-like (LFL) orders, which strip out the effect of store openings and closures, were down by 4.4% over a half-year that was marked by political uncertainty. But LFL orders rose by 3.3% in the first seven weeks of the second half of the year. 

The update came as the sofa and carpets business, ranked Top500 in RXUK Top500 research, today reported revenues of £152m in the six months to January 25. That’s 0.3% ahead of the same time last year. At the bottom line it reported a loss of £0.6m after moving to new accounting standards, but said it would have reported a profit of £0.7m were it not for the accounting change. Last year it reported a pre-tax profit of £0.5m. 

ScS chief executive David Knight said: “While consumer confidence remains low, the group has been successful in sustaining profitable growth and increasing its resilience. Trading in the early part of the year was particularly challenging. However the improvement and return to growth seen over the key winter sales period and for the first six weeks of the second half was encouraging.

“In the past week we have seen reduced footfall and we are mindful of the developing situation with Covid-19 and the potential impact on deliveries and demand. However, we believe the group is as well positioned as it can be.”

Multichannel strategy

During the first half, the retailer rolled out its new in-store nYwhere sales app, allowing staff to complete orders in store on a tablet-friendly interface. The new app, says ScS, has helped the business to make the most significant change it has made in the past five years – centralising its retail administrators and its customer experience team. This, it says, gives shoppers support from a larger team – and a more consistent service. The centralised app also enables flooring surveyors to complete orders within the customer’s home. The retailer said it was one of just four UK companies to have an excellent Trustpilot rating (4.5 stars) over 200,000 reviews.

ScS is currently replatforming its website and says that remains on track. 

Covid-19 update 

More than a quarter (29%) of ScS’ furniture came from China in 2019 and the retailer is currently seeing longer lead times that it expects to return to normal by the end of the year. Customers, it says, have been notified of any delays and have generally been understanding. As yet, it says, it has seen no delays at its UK manufacturing suppliers. 

But it identified risks that it might need to close its stores, head office or distribution centres, the latter potentially delaying deliveries and sales.

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