The furniture manufacturing sector is facing significant challenges as rising labour costs and weakening demand impact sales and profitability. Recent financial data reveal a 24.5% drop in total sales and a notable decline in pre-tax profits.
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Leisure Furnishings, a UK-based manufacturer, reported sales of £13.8 million for the year ending 30 September 2024, down from £18.3 million in 2023. Pre-tax profit fell to £684,000 from £992,000 the previous year. The company cited statutory wage increases as a key factor behind rising labour costs, which have severely affected the business.
According to the firm's annual report, "turnover has decreased by £4.6 million after what has been a challenging but successful year." Unlike the previous year, when cost increases were passed on to customers, the company absorbed additional expenses in 2024, leading to a 15% reduction in workforce.
Despite these pressures, Leisure Furnishings maintains a "cautious but positive outlook" for the coming year, supported by cost-cutting measures designed to mitigate the impact of inflation and falling demand. The company aims to stabilise operations while adapting to ongoing economic uncertainties in the furniture market.
Source: www.bigfurnituregroup.com