DFS profits soared in the first quarter as the sofa giant widened its customer base with the launch of new ranges and a change in tone in its advertising.
EBITDA was up 17.2% to £10.2m in the 13 weeks to October 27.
The retailer launched more premium ranges in the quarter, including its French Connection range and its tie ups with magazines House Beautiful and Country Living.
Chief executive Ian Filby said the tie ups and the “change in tone of advertising” had helped widen its customer base. Under Filby DFS has launched more aspirational adverts, compared to its traditionally promotion-heavy stance.
“We’ve broadened our range of customers,” said Filby. “We’ve hung onto our traditional customer base but now also have slightly more aspirational customers.”
Sales grew 12.3% to £144m in the quarter as the retailer benefitted from investing in store openings, staffing levels, manufacturing and advertising. “We’re not pulling back or retrenching,” said Filby.
He added that EBITDA had been boosted by rising turnover as well as spreading fixed costs “thinner”, including marketing, due to store expansion.
The retailer opened its second overseas store in Cork on Saturday. It opened its first overseas store in April in Dublin.
Filby said the DFS offer is chiming with Irish customers. “Everybody’s looking for really good value for money,” he said, adding that cash strapped shoppers “retrench to strong brands” in tough times.
Filby is expecting a strong Boxing Day Sale period. “We’ve got good momentum, strong advertising, and a good product range,” he said.
However, he remained cautious on the outlook for the furniture market in 2013. “We’re predicting it to be equally as tough as 2012,” he said.