UK post-lockdown sofa sales surge, says DFS

Post-lockdown sales of sofas have surged at homeware retailer DFS Furniture, as people spent money on new furnishings after months confined to their homes because of the coronavirus crisis.

Sales over the past six week were £100m higher than initially expected, the company said, news which sent DFS shares up by 13%, to 170p.

The retailer sells from stores branded DFS, Sofa Workshop, Dwell and Sofology and is market leader in the UK, with a share of about 30%. It has benefited from offering its products both in-store and online.

“The thing that has been a pleasant surprise for us has been that people seem to be switching their spend into home as opposed to holidays, or leisure, or fashion,” said DFS chief executive Tim Stacey.

Demand for made-to-order sofas has led to longer waiting times – they have risen from an average 4-6 week usually seen as this time of year to 11-12 weeks.

“We have 1,000 people in the UK making sofas every day and we are flat out at the moment,” said Stacey, adding that the company is actively looking at investing in UK manufacturing.

Customer spend is up to 9% higher than pre-Covid, as consumers trade up to more expensive premium ranges. Consumers are also opting for brighter colours, said Stacey, with popular choices including deep orange and navy blue. “There is definitely a shift away from the various shades of grey that we have had for the last few years, moving to a bolder colour palette.”

However, the chain said it was difficult to forecast longer-term trading, given the ongoing effect of coronavirus on consumer confidence, and the potential impact of Brexit.

“A boom in sofa sales makes perfect sense,” said Russ Mould, investment director at stockbroker AJ Bell, “After all, if you’re going to spend so much time at home, why put up with tatty seats, peeling wallpaper and fridges on the blink?”

However, Mould cautioned that consumer spending on homeware may not last as people return to their offices, worry about their job security, or if the autumn and winter bring a rise in coronavirus cases.

“DFS has effectively had an early Christmas present, and possibly seen a boost normally associated with Boxing Day and New Year sales,” Mould said, “But one has to wonder if DFS has already seek its peak earnings season this year.”