Increased costs impact margins at hardwood furniture retailer

Hardwood furniture retailer Oak Furnitureland has reported another growth in sales as turnover climbed towards £300m.

According to its latest filed accounts for the year ended 30 June 2023, total sales rose 3% to £283.7m from £275.2m in 2022, further adding to its growth of 10% from £251m in 2021.

Pre-tax losses resulted at £31.9m, significantly down from its profit of £484,000 recorded the previous year.

Stated within its report, the company said that the uptick in turnover was driven by further development of product ranges and a strong performance across its showroom estate.

“Profit margins were lower (52% from 54.2%) due to a combination of costs increases, particularly the costs associated with shipping goods from Asia in the early part of the financial year, along with the group’s strategy to continuing to offer great value for customers in an environment where discretionary spending is under pressure,” the retailer said.

“To mitigate the impact of this, the group continued to focus on driving operational efficiencies and cost control. Shipping costs started to ease from the second quarter and have shown a steady decline throughout the financial year, ending the year at levels much closer to historical norms.

“This underpinned a return to positive operating profit in the second half of the year, with the group delivering £7.4m and is in a strong position to continue this trend into the next financial year.”

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