A prominent Italian upholstery retailer faced a notable profit decline in 2023, despite modest revenue growth. Completing its acquisition of the UK-based sofa chain ScS in January 2024, the company, Poltronesofà, reported a 31% drop in net profits to €42.9 million for the year ending December 2023, as increasing operating expenses outweighed a 3.4% revenue rise, which reached €590.8 million.
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Higher administrative and operational costs contributed to this decline, with the gross margin narrowing by 10 basis points to 47.6%, and EBIT reducing by 20% to €57.9 million. The primary driver of the revenue growth was an expansion in store presence, including two directly-operated stores and two new franchises in Italy, as well as 16 additional stores in France, and two each in Belgium and Switzerland. In total, the Italian market contributed €375.5 million in sales, while international locations brought in approximately €175 million.
These financial results were recorded before the finalisation of Poltronesofà's acquisition of ScS, valued at £99 million, which positions Poltronesofà strategically within the UK, where ScS holds a significant market share as the second-largest upholstery retailer. The acquisition extends Poltronesofà's reach into the UK, supplementing its existing European market presence and diversifying its operational base.
Poltronesofà's decision to expand overseas aligns with a long-standing interest in the British market, evidenced by previous equity involvement in the sector. Moving forward, Poltronesofà aims to leverage ScS's established brand and market positioning to bolster its overall growth strategy across Europe.
Source: www.thefurnishingreport.com