Furniture supplier Devonshire Living has reported a slight reduction in sale but has invested heavily within its sales department to bolster future results.
According to its latest filed accounts for the year ended 31 July 2023, total sales fell 24% to £6.6m from £8.7m in 2022. Pre-tax losses resulted at £20,000, down from its profit of £264,000 recorded in the previous year.
Stated within its report, the company said gross margin decreased to 24% from 26% year-on-year, while net assets totalled £4m, in line with the prior period.
Commenting the on the results, Devonshire said: “The 12-month period August 2022 – July 2023 was a turbulent one for the furniture industry as a whole. At the start of the period, shipping rates were well on the decline from the post-pandemic hike, however electricity, fuel and general cost of living prices such as groceries were shooting skyward, affecting customer confidence and disposable income.
“Because of this, we did predict that the sales boom from coming out of the final Covid lockdown would level out in this year, however unfortunately four of our top customers chose to close in this period for various reasons including retirement and cashflow issues, which has had a big impact on our annual turnover and account for well over half of the decline shown in these figures. We are confident that we will have these gaps filled within the next financial year, especially after being welcomed in to AIS as an approved supplier in October 2023.
“In the early months of 2023 we undertook an ambitious project of reducing our selling prices across our entire portfolio. The reason for this was mainly due to the more realistic shipping rates, however this did mean that we would be taking a huge hit on profitability for the £4m worth of stock we held, which had still been brought in at the highest expenses.
“In April of last year, we also made the strategic decision to invest heavily in our sales department, employing two full time Area Managers, committing to additional Furniture Shows, and improving on our point-of-sale materials such as new CGI imagery. These expenditures continue in to our current financial year, and although we are beginning to see positive results from our efforts, we have a lot more work to do in that area over time.”
