A Plimsoll Publishing report looking into the profitability of the UK furniture retailers market has found just under a fifth of companies have recorded a loss for the second consecutive year.
The report found that 150 of the UK’s largest furniture retailers made a second consecutive loss, as average profit margins in the industry are at 4%.
Of the 873 companies analysed, further findings reveal: 287 firms recorded a loss; 150 companies have made loss for the second consecutive year; 72 of the businesses that made a loss increased sales; and 193 companies have been rated as in danger.
David Pattison, senior analyst on the project, says: “Profitability is key to a company’s success. The difficulty for any business working in a very competitive market is to make a good profit.
"It would appear the pressure in the market is having an impact on the ability of some companies to make a profit. It is of course down to the individual company as to how much profit can be realistically made, but the consequences of not delivering a profit at first glance would seem apparent – 193 are firms are now rated as now being at high financial risk.
“For the companies that are falling behind, they need to re-evaluate their strategy and retain profit in order to improve their financial strength. Further to that, however, it appears there is some cause for optimism as the report showcases 373 firms as 'exceptional' performers. These firms, despite the pressure in the market, have recorded record profits and sales increases. The report uses these as example companies of the success that can be achieved even in a saturated marketplace.”
