Profit falls at high-end furniture retailer

Independent high-end furniture retailer Heal’s has reported a decline in profit.

Earlier this year, Wittington Investments, the firm backing Heal’s, reported sales of £37.4m for the year ended 16 September 2023, slightly down from £37m in 2022.

In the latest set of Heal’s accounts for the same period, EBITDA stood at £2m, while pre-tax profit resulted at £500,000, down from £1.4m recorded in the previous year.

Stated within its report, the company said that its new Tottenham Court Road retail space, which underwent a significant remodelling that saw a much larger ground and lower ground floor implemented, has benefited with sales increasing since its completion back in April 2023.

“The directors are pleased to maintain sales at a similar level to the previous two years, demonstrating the resilience of the offer in a period where many competitors have struggled,” the business said.

Wittington Investments previously said: “Heal’s has experienced a difficult period for profitability as inflationary pressure squeezed margin and increased the cost base (with the exception of its new Tottenham Court Road lease).

“Revenue remained materially flat at £37.4m, however the dual challenges of supply chain and wage inflation drove a 50% reduction in operating profit to £0.8m (£1.6m in 2022). Perhaps the biggest challenge was in dealing with old (returned and cancelled) stock, which led to a very significant write down which suppressed profit.

“Heal’s continues to generate a positive operating profit and EBITDA and the underlying performance remains sound. Excluding the write-down of stock, profit would have increased from the prior period.

“The strategic focus of the company going forward is to capitalise on its new store layout on Tottenham Court Road and to grow its online presence, which now accounts for half of sales revenue.”

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