A sofa manufacturer and wholesaler faced a sharp drop in sales last year following the loss of a long-term client. The customer, which adjusted its buying strategy and consolidated suppliers, caused a significant decline in the company's overseas revenue, which fell from £5 million to £942,132 for the year ending 31 December 2023.
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UK sales remained relatively stable, dipping by only 1.3% to £4.96 million. However, the steep drop in international sales led to a 41% decline in overall revenue, which fell to £5.9 million. The financial downturn pushed Scan-Thors (UK), based in West Yorkshire, into a net loss of £757,560, compared to a profit of £215,624 in 2022.
The business, part-owned by Denmark's Scan-Thor Group and holding a majority stake in Skopje-based Domo Sofa, has forecasted another loss in 2024 due to challenging market conditions and weak consumer demand. The company's current financial year ends on 31 December 2024.
In a statement, the company highlighted its 2025 strategy of offering competitively priced products to position itself for any market recovery. Despite the year's challenges, it reported positive cash flow, supported by a reduction in receivables. This shift moved the business from a net credit draw down to a positive cash position of £348,045 by the end of 2023.
The losses, however, led to a decline in net assets, which fell to £3.25 million from £3.97 million the previous year. The company remains focused on navigating difficult market conditions and is poised to take advantage of potential improvements in the economic climate.
Source: www.thefurnishingreport.com