Furniture chain Lombok has bounced back into the black, after instigating a turnaround plan that saw it slash costs and shut stores.
In the year to August 1, Lombok revealed a profit before interest, tax and exceptionals of £1m compared with a loss of £1m the previous year. Total sales were £11m, compared with £15m the previous year when the retailer was trading from 19 shops. It now has 14. Sales in the second half rose 21% to £6m.
Like-for-likes grew 7% in the year, and it is trading “double digit up” since year end, according to managing director Stuart Lewis.
Lombok suffered in the recession as the demand for big-ticket items waned. It was bought out of pre-pack administration in July 2009 by Privet Capital, which initiated a turnaround of the business, hiring Lewis as managing director in May and Martin Toogood, former chief executive of collapsed furniture chain Ilva, earlier this year as chairman. Five of Lombok’s 19 stores were shut.
Lombok said it has delivered “significant cost savings through rent negotiations, relinquishing unprofitable leases and reorganisation of warehouse facilities” in the period.
It said it had experienced a surge in online sales, growing 20%. Lewis said the strength of the website has helped Lombok “re-establish itself”.
Lewis said: “This represents a great step forward for Lombok. [The turnaround] has re-established the business to one that is ready to go forward. We’ve focused on customers and execution of retail standards.
“We’re still quite cautious about the economic outlook, and are taking it a quarter at a time. We’ll also take a cautious approach to expansion. It’s a challenging market.”
Lewis added that Lombok would not pass the VAT rise onto customers next year. “Our prices will stay the same,” he said.
Lombok is introducing new product ranges including more contemporary styles and a number of limited edition items, as well as a “significant” accessories offer in time for spring.
The retailer is also mulling different types of formats, having opened a Christmas pop-up shop in St Albans last month, which Lewis described as “really successful”.