Sofa king warns more furniture retailers are likely to fail
Sofa king Lord Graham Kirkham has warned that more furniture players are likely to fail, as his company DFS chalked up another strong performance in difficult market conditions.

DFS has recorded like-for-like sales up 5 per cent in its current financial year, which ends in July, in sharp contrast to the woes of its furniture and home rivals. SCS, Ilva and Carpetright are among those having a torrid time, as fears that higher interest rates are hitting consumer confidence abound.

Kirkham, who took DFS private in a£500 million deal in 2004, said that he expected the outlook to remain difficult. 'There have been failures and there will be more failures,' he said. 'Some will either go under or go out of the market.'

But, while he admitted that market conditions were 'challenging', he said that the increases in interest rates were prompting some shoppers to invest more in their existing homes, rather than move house.

Retail Week can also reveal that, in the 52 weeks to July 29 last year, DFS's profits grew 3.5 per cent to£61.4 million on flat sales of£575 million. Only one store was opened during the year, as the company focused on consolidating its existing business, rather than expanding the store base. 'It has been about running faster to stay in the same place,' said Kirkham.

He said that the arrival of Tesco into the market would inevitably make life harder for furniture retailers. 'When you have the loyalty they've got, you're bound to do business,' he said.

Kirkham also revealed that he is considering moving DFS into product areas beyond soft furnishings, once he feels he has the country fully covered with stores. 'Once we have opened another dozen stores or so, we will have to look much more seriously at other areas, such as beds,' he said.