Furniture business absorbs spiralling costs as margin declines

Furniture manufacturer and retailer Vitsœ has reported a growth in turnover while profits slightly declined.

According to its latest filed accounts for the year ended 31 December 2021, total sales rose 18% to £14.9m from £12.6m in 2020. Pre-tax profit resulted at £1m, down from £1.6m recorded in the previous year.

Stated within its report, the company said a decline in gross margin was due to operational challenges, spiralling costs of materials and distribution, as well as taking the decision to not pass on these cost increases to the customer.

Vitsœ added that 73% of its revenues was driven by exports during the year, including 19% from the EU. Stock levels continued to increase to ensure “delivery security for customers worldwide”.

“During 2022, remedial works to the roof of the company’s production building in Royal Leamington Spa were completed. While Vitsœ expects to make a substantial recovery in ongoing legal action for the recovery of the remedial costs from third parties, Vitsœ is now able to focus fully, once again, on its operation business,” the company added.

“A new ERP system was due to be implemented in 2022 but the selected product proved unfit-for-purpose prior to launch. It was abandoned and the costs written off. An alternative system was selected and is now due to go live in 2023. This important investment will enable the business to grow in a structured manner over the long term.”

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