Oak Furnitureland reports that it made "significant strategic and operational progress … despite a challenging market backdrop" in the year ended 30th June 2024, and entered 2025 "in a strong position to deliver future growth".
The retailer enjoyed a strong start to FY25, with bookings in the 16 weeks to 22nd December up +9% LFL, underpinned by material market share gains – and its performance continued positively over the peak trading period.
The business has been recapitalised, and says it is well set to deliver future growth plans, with a substantially reduced debt profile.
In FY24, group revenue declined -17% YoY to £236m due to reduced volumes caused by "a soft market, the Red Sea disruption and the subsequent impact on freight and inflation costs": "Despite this, group operating loss improved by +19% to £12.4m versus £15.4m in 2024, driven by the diverse product pipeline and focus on enhancing the online and showroom estate.
"Improvements included a new incentive scheme, mystery shopping programme and ongoing digital transformation to optimise the customer experience from research to purchase.
"Gross margin improved by +5.5%, but the company continues to take a disciplined approach to cost management and operational efficiencies to improve overall profitability."
Oak Furnitureland secured additional funding of £10m and equitisation of £47.8m in June 2024, more than halving the business’ financial debt and strengthening the balance sheet. "This has enabled continued investment in the business’ strategic plan, which in turn has driven a material level of market share gain so far in FY25," it says.
Operational highlights include the successful trial and embedding of a new interest-free financing offer, available on all purchases over £499, and interest-free for 36 months; strengthening the ‘Grow Your Home’ brand platform, with a marked improvement in Brand Health Scores; making significant progress on its Customer First Strategy with the business’ latest NPS (Net Promoter Score) at 78; the enhancement and diversification of its product proposition with a focus on a broader home offering, including new upholstery, beds and cabinetry; and the expansion of the showroom portfolio, with a 10,000 sqft Grimsby showroom launched in March 2024, and the North Shields showroom on Boxing Day 2024.
The retailer also implemented a number of measures to mitigate continued freight risk, including strengthening partnerships with key freight providers and balancing the business’ sourcing mix.
CEO Alex Fisher comments: "Against a challenging market backdrop, with softer volumes and higher inflation, Oak Furnitureland delivered a resilient financial performance.
"Throughout the year, we have made significant headway in driving operational efficiencies alongside enhancing our product proposition to serve the whole home and make our brand more accessible to even more customers.
“I am proud of the strategic progress we delivered in the period, with the successful trial and adoption of our competitive interest-free credit offer, which resulted in the business securing additional funding and equitisation. This has strengthened our balance sheet and, together with continued investment in our brand platform, has driven market share gains and positive LFL performance during the first half of FY25, putting us on a much firmer footing for the year ahead, with a clear plan to drive growth going forward."
