Upmarket Colefax and Fowler fabrics and wallpapers have proved surprisingly resilient during the current lockdown but global travel restrictions have hit its interior design business hard, the group admitted today.
Colefax, which owns the Cowtan & Tout and Jane Churchill brands, is famed among the international wealthy set for its English country house-style interior design consultancy work. But to work for its many foreign clients, its London design team have to be able to travel the world to their luxury properties.
Travel restrictions have made that hard, and in the half year to 31 October, its decorating division saw sales slump 60%, with the previous year’s £255,000 profit for the period turning into a £687,000 loss.
Brexit is making trade with the EU more costly, making matters worse.
That said, its core fabric division sales - used for curtains, furniture coverings and other interiors - bounced back strongly from the first lockdowns.
Chief executive David Green said interest in home improvements had surged during the crisis and that the current lockdowns had not been as damaging to demand as the first one.
Brexit is causing a headache due to increased overheads in exporting to the EU but Green said he was “cautiously optimistic” about the future, particularly given a robust performance in the US, where American homeowners have continued placing orders with the English brand.
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The US makes up 62% of its fabrics sales.
Pre-tax profits for the half year were up 17%, from £2.9 million to £3.4 million, although that was flattered by Colefax’s decision to delay its Autumn product range launch, deferring the large costs that incurs until 2021.
Sales were down 14% to £37 million, within which, in the core fabrics division, the US was down 5.9%, the UK by 11.7% and Europe by 2%.
Thanks to the delay of the autumn range launching, cash increased £8.4 million to £19.9 million, but that will fall as it invests in the new ranges this year.
Chairman Green said: “The easing of lockdowns resulted in renewed interest in home related spending and we believe this is the reason for a sales recovery which has exceeded our initial expectations.
"In the last two months, restrictions have been re-imposed to varying degrees in both the UK and our export markets but so far, the impact on sales is much less than we experienced during the first lockdown.
“Brexit has added an additional layer of cost and complexity to our European business which we will try to mitigate as far as possible.
“We are cautiously optimistic about future prospects especially as 62% of our sales in the Fabric Division are in the US, where sales have been very resilient during the pandemic".
"The Group has a strong balance sheet and we will continue to invest with confidence in our portfolio of luxury brands and our worldwide distribution network".
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