A decline in overall sales and a significant rise in pre-tax losses have marked a difficult financial year for a well-known luxury rugs retailer, reflecting continued pressure across the sector.
For the year ending 31 March 2024, The Rug Company reported total sales of £9.5m, down 5.9% from £10.1m in the previous year. Pre-tax losses widened sharply to £1.3m, compared to £347,000 in 2023.
Retail sales fell by 4.5% to £8.3m, while franchise sales declined 7.6% to £1.2m. UK revenues dropped 7.9% to £6.9m, while sales in the EU rose significantly by 76% to £1.2m. US sales saw a modest increase to £754,000, up from £729,000. However, revenue from the rest of the world nearly halved, falling to £560,000 from £1.1m.
The company attributed the downturn to a "challenging macro-economic climate" that created "difficult trading conditions" throughout the financial year. Despite these headwinds, the business reported an improvement in gross margins, which rose above 50%.
Looking ahead, The Rug Company stated that it is prioritising digital transformation as a key growth strategy. A newly launched e-commerce re-platform went live in FY25, which the business says is already delivering "continued positive results".
The company reaffirmed its commitment to focusing on areas with growth potential, particularly digital operations, to support long-term profitability and improve performance amid a tough retail environment.
Source: www.bigfurnituregroup.com