Sofa retailer SCS is pushing ahead with store expansion plans despite a slowdown in trading last month.
The 97-store retailer is seeking to open five stores this year, but chief executive David Knight said there are 20 locations on his “wish list”.
The slowdown in February has meant SCS has had to make “a very small number” of staff redundant, said Knight. He said the retailer hired more to cope with growing trade in autumn and the January Sale period, but hit a rough patch in February.
About 40 of the 1,200-strong workforce have been made redundant. Affected employees were those to have joined the company recently or who were on short-term contracts.
Knight said: “We traded strongly in autumn and through the January Sale. We staffed up to accommodate the growth, but have seen a bit of a slowdown in February. But it has improved in the last few weeks.”
Knight said the store openings, in undisclosed locations, would improve coverage in parts of the UK where SCS is underrepresented. The shops will be 6,500 sq ft to 10,000 sq ft.
He said: “We are in a strong position to take opportunities as they appear.”
He added that SCS was “seeing some better deals in this climate”, but that competition was still fierce in the stronger retail parks where it wants to open.
SCS will also continue the store refurbishment programme it began over Christmas, when it revamped five shops. “We have seen positive returns and will look at doing more this year,” he said.
Knight remained cautious on the outlook. “We had a strong year last year, but our customer is not wanting to overstretch themselves. A lot of this is affected by fuel and job uncertainty,” he said.
However, he said that SCS had benefitted from introducing more upmarket brands in an attempt to widen its appeal last year, and that its average transaction value has increased.
Knight said that as a result, despite tough conditions, the retailer is “well positioned” for the year.