A Century of Resilience and Adaptation – ScS Positive Trading Updates and Remarkable Growth

A Century of Resilience and Adaptation – ScS Positive Trading Updates and Remarkable Growth

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Another trading update was provided by ScS (Sofa Carpet Specialists) following the conclusion of two Bank Holidays in May. This update demonstrated a healthy increase in sales. In the update, the company recorded a rise of 14.6 percent in order intake for LFL sales for the 45 weeks leading up to June 4th, 2016.

By the beginning of 2016, ScS said that their order intake had increased by 8.8 percent for the 25 weeks leading up to January 16th, 2016; by the beginning of April 2016, order intake had increased by 12 percent in the year’s initial 37 weeks. This indicates that the company anticipates posting good profit reports well before their immediate market expectations, which have been dramatically raised throughout 2016. The company claims that the trading results were better than initially anticipated and that growth has continued to point to outstanding progress across the board regarding retail categories.

A century of staying afloat

The origins of the ScS trade may be traced back to Sunderland in the 1890s when the company was still family-owned and run as a general store specialising in home furnishings. By the 1980s, the Group had eight stores operating under the Sofa Carpet Specialists moniker, most of which were located in the North East region of England. The company’s primary focus was on producing upholstered furniture at the time. A management buyout occurred in 1993 at ScS, followed by a significant expansion of the company’s operations throughout the United Kingdom, not just in the North East. The primary goal was to establish it as the leading retailer of upholstered furniture in the United Kingdom within contemporary, larger stores in retail park regions outside the city.

In 1997, ScS actively pursued further expansion and floated on the London Stock Exchange. At that time, the company had a presence throughout the UK with 12 stores and three main distribution sites. As a direct consequence of this, ScS increased, and by the year 2007, the business had expanded its estate to include 95 stores and 9 distribution hubs to service them. During that period, the organisation handled many operational activities, including modifications to business processes, information technology, and management information systems.

The economic downturn that began in December 2007 and continued until December 2008 affected the company. Partners, such as credit insurance, withdrew their support, leaving the company needing long-term and immediate funds. As a consequence of this, Sun Capital was able to acquire ScS in July 2008. Following the company’s acquisition by its new owner, Sofa Carpet Specialists began executing new plans to broaden its customer base while cutting its fixed expenses. Although economic conditions hadn’t improved, it planned to continue expanding.

Shopping is done online with a refined focus on ScS.

After being around for a century, it was abundantly evident that the ScS’s resilience and adaptation strategy enabled it to survive for decades. To facilitate its expansion and adaptation strategy in a dynamic environment, ScS built a new website in 2014 to enhance the overall quality of its clients’ web shopping experience. The plan was to provide a user-friendly one-of-a-kind website that would smoothly integrate an offline and online environment focused on the client. Customers are provided with a one-of-a-kind digital experience made possible by pictures of the highest possible quality, rich, in-depth content, and simple navigation thanks to the new website’s expanded capabilities. Customers may quickly and easily locate the required furniture with a few clicks of the mouse.

The impact on

It was anticipated that the improved quality of the user experience would positively impact the company’s revenue and overall success. The reported order intake and total sales experienced a 9.1 percent growth during the interim results covering the first 26 weeks up to January 23rd 2016. Compared to the first half of 2015, when gross sales were at £132 million, they have since increased by 10.2 percent, reaching approximately £145 million. Compared to the first half of 2015’s total revenue of £57.3 million, ScS’s gross profit rose by 13 per cent, reaching a total of £64.8 million.

The increase in the gross margin skyrocketed to 44.6 percent in the second half of 2015, up from 43.4 percent in the first half of the year. The operating loss came in at £3.4 million, a significant decrease from the loss of £5.3 million recorded during the first half of 2015. The company’s cash flow from its operational activities increased to $17.3 million in the second half of 2015, compared to only $11.9 million in the first half of 2015.

The next stage of progress

Since 2014, ScS has improved its online presence, which has resulted in greater sales. These changes have allowed the company to improve its sales position. After the opening of the Bromborough store on the Wirral in December 2015, the total number of stores owned by the Group increased to 97. The company anticipates opening two new locations in Plymouth and Aberdeen by the end of the summer of 2016, with a third location opening in Thanet on Christmas Day of that same year.

Following the launch of the ScS e-platform, the company reported a 17.3 percent rise in online gross sales, translating to a total of £4.3 million, compared to £3.7 million during the first half of 2015.

Promising outlook

The ongoing expansion of the furniture company bodes well for the company’s future growth potential. The Group’s concession arrangement exists with the House of Fraser to offer concession ranges on the carpet and upholstered furniture in Fraser’s brand ‘For Living’ since 2014, as well as the ever-expanding online offers and flooring propositions, contributing to the growth of the company. The concession is still active within 30 stores throughout the United Kingdom and belongs to the House of Fraser.

ScS is continuously looking for new shop opening prospects to maximise its growth in the areas that it has targeted. The stable financial condition of the furniture franchise has been shown both by the commitment of significant bank facilities and by the dynamics of cash flow. This helps the company achieve its goals for future growth while also providing substantial value to the shareholders of the Group. The Board of Directors demonstrated their confidence in the company by announcing an interim dividend on April 12th, 2016, which was 4.67 pence for each share.

Presenting one’s wares

The UK’s Sofa Carpet Specialist is still one of the country’s largest suppliers of carpets and couches. It now has around one hundred locations across the United Kingdom and a sophisticated and robust online offering accessible through its website. In addition to selling a one-of-a-kind branded range of products under particular registered trademarks like SiSi Italia and Endurance, as well as providing a third-party range of products like Parker Knoll, G Plan, and La-Z-Boy, ScS continues to specialise in both leather and fabric sofas. This is in addition to selling products under registered trademarks like Endurance and SiSi Italia. In 2012, the company launched its flooring business, which initially concentrated on carpets, vinyl, laminate flooring, and other types of flooring.