DFS to increase manufacturing in the UK post-Brexit

The Doncaster-based sofa retailer currently has five UK factories that make around 50% of its stock on these shores.

After unveiling a 6.8% half-year sales rise, chief executive Ian Filby told Retail Week that growing the number of UK-made products formed part of DFS’ strategy to swerve the adverse effects of the slumped pound.

Filby said: “It’s part of our strategy to offset FX pressures. We haven’t got a specific goal, but I would see the direction of travel continuing to drift towards the UK as a proportion.

“Our UK manufacturing is a great advantage and gives us an edge over the market.

”We’ve been doing it for 47 years at our five factories here in the UK, and they are making more than they’ve ever made before. It’s truly part of our DNA.”

DFS’ margins were “impacted” in its half-year as a result of the adverse currency movements, principally the weakening of the pound against the US dollar.

It said it is taking a number of actions to mitigate the pressures, including range management and supplier negotiations. 

The vertically integrated firm has been driving its UK roots home with an animated Christmas marketing campaign and its award-winning sponsorship of Team GB at the Rio 2016 Olympic Games.

Strength online

Filby puts DFS’ consistent growth in part down to the resilience of its online offer.

“We’ve invested fabulously online and that’s a particularly strong area for us,” he said. 

The company’s half-year online sales grew 13.9% year-on-year.

Small-format concept

The retailer is trialling a range of small-format stores with its third now open in Crawley.

Although Filby would not commit to a specific number of those stores, he said the concept was “exciting” and that he’d “like to do a little bit more learning around the country”, as the first few stores are within the London area.

DFS, which operates from 112 UK stores, is opening a traditional big-box store in Ashford next month.