Nationwide furniture chain, HSL, which holds a strong grip on the adjustable bed and rise recliner market, is looking to bounce back from a challenging year that saw turnover drop 15% to £44m and post-tax profits fall below £1m.
The company, which owns around 60 stores across the UK, said its reduced revenue in 2017 was partly due to its “strategic plan” to reduce its marketing activity, which had been unprofitable in the previous year.
According to HSL’s latest accounts for the year ended 31 December 2017, market uncertainty and economic conditions resulting from Brexit, a general election and terrorism impacted consumer confidence on items like furniture.
HSL, which also manufacturers some equipment, opened a single outlet in 2017 but maintained that the slowing of its store openings was part of its strategy to “build [its] business for the future”.
Its new store is a combined retail showroom and home consultation hub in Belfast, which marks its entry into Northern Ireland.
The report stated that during 2017 HSL “bore the full year impact of the investments [it] had made in the board of directors and senior management team.”
It added that it had made “significant” investment across the business to grow the brand, develop its operational capability and to improve customer experience.
During the period, HSL launched an in-house national repairs and aftercare team, grew its in-house logistics operation and established a customer experience team.
It also rolled out a number of new furniture and bed ranges across its stores and introduced its CleverComfort brand campaign across all media channels.
These investments coupled with the reduction in sales saw EBITDA fall more than 50% to just under £2m.
HSL said that while the UK market outlook “remains challenging”, its directors are confident of its long term growth prospects and future development.
Between 2015 and 2016, post-tax profits fell from £2.6m to under £2m and turnover rose by around £2m.