Following today’s release of ScS FY figures for 2019/20, Matt Walton, Senior Retail Analyst at GlobalData, a leading data and analytics company, comments:
“The shape of ScS’ financial year largely mirrors competitors; orders at ScS contracted 92.5% during lockdown before they roared back since re-opening, increasing by 92.2% during the final nine weeks of its FY2019/20. This momentum has continued into its current financial year, with orders up 51% for the six weeks to 5 September 2020, increasing its revenues-to-date by £19m on last year, and by 45.8% for the first nine weeks as pent-up demand was released. Coupled with a strong order book to its FY2019/20, the upholstery specialist has had an exceptionally strong start to its FY2020/21 and helped it gain share from the likes of Harveys and Oak Furnitureland.
“It’s enlarged order book has also helped the retailer’s cash position, which, at £82.3m, is at its strongest in five years. This is a result of prudent cost control, transitioning marketing spend from newspapers to programme sponsorship deals, and securing rent deferrals from landlords. ScS was also able to renegotiate the covenants on its existing revolving credit scheme, should it need this funding in the future.
“Online continued to be a bright spot for the retailer, with sales through the channel increasing by 13.6% for the year, driven by a 24.5% uplift during the first half of its financial year. The retailer has continued to invest in this channel, re-launching its website in late July to improve its checkout, its functionality of mobile devices and to better showcase its products to customers. This investment will be crucial for ScS as shoppers increasingly use online to conduct pre-purchase research and have emerged from lockdown more comfortable making bigger-ticket purchases online.
“Despite this strong start of the year for ScS, the final three months of 2020 will be challenging. Consumer confidence is set to remain fragile as rising levels of unemployment and uncertainty surrounding the end of the EU transition period discourage many from making large purchases. While ScS’ store layout means it is less impacted by social-distancing protocols, tighter restrictions regarding COVID-19 could reduce footfall, preventing customers from testing products instore prior to purchase.”