sTERLING Furniture, one of Scotland’s best-known retailers, said hikes in VAT and ongoing economic uncertainty delivered a 12 per cent hit to sales which fell to a “disappointing” £41.7 million last year.
The retailer, which has nine Scottish outlets including a showcase retail park near Tillicoultry, Clackmannanshire, said that while economic woes meant high-value discretionary spending was “badly hit”, its performance for the year to the end of February 2012 was “fair …under what was difficult circumstances”.
In its annual financial report submitted to Companies House, the retailer said that cost controls meant the impact of falling sales was “considerably reduced”. The company made a pre-tax profit of £34,500 during the year compared to £616,400 the previous year. Staff numbers fell nearly 10 per cent to 460, cutting nearly £600,000 from its wage bill.
The highest-paid director, expected to be managing director Gordon Mearns, saw his remuneration packet including pension contributions fall from £1m to £627,000.
The statement said that the company directors were “pleased to report that booked sales have improved in the current year and further cost reductions have been achieved leading to improved profitability”.
However, it added that “uncertainty in global markets partly caused by the eurozone crisis, the fear of risk on sovereign debt and the impact of severe austerity measures being adopted worldwide” continued to have a dampening effect and that this was “not expected to improve significantly in the short term”.
The company has outlets in Aberdeen, Dundee, Edinburgh, Falkirk, Glasgow, Inverness and Uddingston, Lanarkshire.