Retail park furniture seller ScS says orders have picked up in recent months but lag below last year's high levels following post-lockdown demand.
The North East-based plc reported first half results to January 28 in which it said overall order intake was down 4.7% and underlying pre-tax losses were £4.7m, compared with £5.6m the year before. Investors were told the performance was in line with a typical year for ScS, with spending on marketing in the first half to prepare for the busy winter sale period.
Gross sales grew 5% to £154.9m and the firm said like-for-like order intake momentum has continued in recent weeks, following the period under review. Earlier this year ScS acquired modular sofa firm Snug out of administration and it now plans to open concessions within its stores, in addition to the brand's one Leeds site and existing concessions.
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Two new stores in York and Swindon were opened last year, bringing the brand's estate to 100 locations. Investment is planned to upgrade eight sites into ScS "concept" stores - a move which has been made in its Gateshead, Uddingston and Coventry stores, which had outperformed others since opening.
The firm also said it had launched a "declutter programme" with the aim to reduce the amount and size of point of sale materials and be more selective about its ranges on display. It said the move had led to an increase in display stock sales.
Steve Carson, chief executive officer of ScS, told BusinessLive the firm was mindful of the pressures faced by consumers amid cost-of-living surges. Pre-pandemic, around half of the firm's sales used credit with that proportion reducing as the country emerged from restrictions but subsequently building back up.
Mr Carson said: "We are the only big player in the market that still offers four years interest free credit. Again, just to help our customers spread the cost. When you think about mortgages or credit cards, or any other sort of credit, interest free is a very compelling offer right now.
"We see more of our customers taking that than we did in the first half of last year, for example. More customers are using the opportunity to spread their payment length."
The cost of providing that interest free credit is rising for ScS. The firm's chief financial officer Chris Muir said an internal debate about the cost versus competitive advantage gained was under way with a decision likely to be made for the final quarter of this year.
In the face of significant supply chain challenges over the past few years, Mr Carson said the business had been successful in rebalancing its spread of suppliers with more now in the UK and Europe and roughly one third in the Far East. Difficulties posed by high container costs and long lead times for customers were said to be abating with both now nearer pre-Covid levels.
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