Homestyle Stays Upbeat As Firm Shrugs Off Pounds 25m Losses
Posted on: Friday, 27 January 2006, 12:00 CST
By TONY McDONOUGH Deputy Business Editor
FURNITURE retailer Homestyle yesterday reported half-year losses of pounds 25.4m but said it was confident its recent cashflow problems were now behind it.
Last year, Warrington-based Homestyle was forced to raise pounds 100m from new shares and forge an alliance with South African household goods group Steinhoff, in order to save the company.
The scale of the crisis was shown yesterday in losses for the six months to October 29, but the owner of Harveys and Bensons said it was now on a more secure financial footing with sales orders since September up 13 % on a year earlier.
The turnaround was most significant at Harveys, where supply shortages, an inability to promote the business and low staff morale caused first-half sales to fall by pounds 23.7m and operating losses to reach pounds 27m.
But with new products and a nationwide publicity drive, Harveys lifted sales orders for the current financial year into positive territory, up 10% in the 38 weeks to January 21.
It said Harveys had re-established itself as a significant national furniture retail chain, although it said much remained to be done to maintain the recent sales progress through product innovation and targeted promotions.
The beds division, which trades under the Bensons, Sleepmasters and Bed Shed brands at 418 outlets in the UK, achieved sales of pounds 94.9m, in line with last year but insufficient to prevent a fall in operating profits to pounds 2.9m.
That was blamed on competitive market conditions, as well as the loss of a number of senior executives and uncertainty surrounding prospects.
Homestyle said recent progress in the division had been positive but that sales orders for the 38 weeks were running 1 % lower than a year ago.
Chairman Donald Macpherson said: "Despite the uncertain consumer spending outlook and competitive trading environment in home related markets, our businesses have progressed well in recent months.
"The group is now on a sound financial footing and our improving performance gives us considerable confidence for the future.
tonymcdonough@dailypost.co.uk
Orders down 1%on last year
Source: Daily Post; Liverpool
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