ScS sales slump after August bank holiday ‘horror’ and Brexit woes
Shares in sofa chain ScS Group have tumbled after it revealed a recent sales hit from hot weather and Brexit uncertainty.
The group’s stock fell more than 7% after it bemoaned “more challenging” trading since its year end in July, with like-for-like orders down by 7.6% in the two months to September 29.
ScS chief executive David Knight said sales had been knocked by the “record temperatures experienced by the UK across the August bank holiday weekend and the increasing political and economic uncertainty we are currently facing in the UK”.
It comes after rival DFS Furniture cautioned last week over “subdued” recent trading as the sector begins to feel the pinch from a Brexit-hit property market and drop in demand for big ticket purchases, such as sofas.
Mr Knight said: “We remain conscious of the impending Brexit deadline, and the impact this may have on the market, consumer confidence and the wider economy.”
The sales decline at ScS marks a sharp reversal of the 4.2% rise over its year to July 27.
It also overshadowed full-year results showing a 5% rise in annual pre-tax profits to £14.3 million.
Jonathan Pritchard, retail analyst for Peel Hunt, said the warm late summer and early September weather had compounded trading woes for furniture retailers.
He said: “August started well, but the Bank Holiday was a horror.
“More recently things have picked back up a bit, but in general industry-wide nerves are winning the day.”
But Mr Knight put faith in the group’s financial strength to see it through tougher times.
He said the chain’s financial health has “never been as strong”.
The group also said it was on the lookout for other acquisitions after its failed attempt to buy rival Sofa.com earlier this year, which was instead snapped up by rival suitor Sports Direct.
ScS said: “We were not successful in this instance, however, an investment like this is something we will continue to consider.”