Scotland’s leading independently owned home furnishing specialist, Sterling Furniture Group, has designs on “exciting times ahead’ in its 50th anniversary year as it reflects on the “prompt and decisive action” it has taken under new leadership to address issues affecting the firm’s financial performance.
The Group’s latest accounts for the 18-month period up to August 2023, published today, point to a challenging period when trading was adversely hit by the combined impacts of reduced consumer confidence post-pandemic and due to the cost-of-living crisis, as well as the ongoing instability of the geopolitical situation and its effects on the supply chain.
Turnover grew from £55.4m in February 2022 to £83.6m in August 2023, while pre-tax profits dropped from £4.1m to £43,870, with the results for the prior period incorporating the end of a number of Covid19-related reliefs such as Furlough and Non-Domestic Rates support.
In their accounts, Sterling Furniture Group acknowledges that “the material decline in profitability for the period is also reflective of the historic lack of action taken to address the cost base of the business given reduced sales revenues and inflationary cost pressures”.
Over a comparative 12-month period, Sterling said that sales were up 3% by £1.6m.
Since the period end, Sterling has reported like-for-like positive growth, with a higher order book and expects to deliver pre-tax profit growth for the FY24.
Founded in late 1973 by George Knowles, the Tillicoultry-based firm last year appointed industry veteran John Pattison as its new CEO. Since taking up the role in August 2023, John has spearheaded a new direction of travel for the business.
Over the past nine months, Sterling, under Pattison’s stewardship, have:
- appointed a number of key senior personnel to their top team,
- instigated a change in style, tone and approach to engage with the wider colleague team on key matters such as company values and colleague communication,
- secured significant new funding in a new and extended arrangement with banking partner Royal Bank of Scotland, which Sterling expects to formalise the terms on over the coming weeks,
- mapped out ambitious plans for the years ahead, including several planned new stores across the Group, starting with a major new 50,000sqft Sterling Home store at Hillington in Glasgow, for which Heads of Terms have been agreed, and change of use proposals have been made through the local authority, anticipated to open by the end of the year.
John Pattison said: “It’s undoubtedly been a challenging period, we needed to take prompt and decisive action to set ourselves back on a sustainably profitable course, but I firmly believe that there are exciting times ahead for Sterling, all our colleagues and customers. To that point I really want to thank all the Sterling team for their incredible hard work, commitment and support in my first 9 months, where we’ve made several significant changes across the Group.”
“We’re powering ahead with the major rebrand to our Sterling Home marque and our leadership team has been reinforced by a number of significant senior hires that have already put the company in the best possible position as we build on the legacy created by George Knowles and embark on the next 50 years.
“This is a historic Scottish company with a long-cherished reputation for quality and we’re brimming with ideas for how we’ll ensure Sterling is leading the way as the home of inspiration for Scottish consumers.
“We’re delighted to have received, and agreed, credit approved terms for a £10m banking facility from Royal Bank of Scotland, which we expect to confirm terms on over the coming weeks. In addition to consolidating Sterling’s existing term borrowings, the Facility provides expansionary funding, in the form of a Revolving Credit Facility, to support the exciting growth and development of the Sterling estate over the next five years. Working with a Scottish bank that wants to support us to grow is hugely important, and the team at RBS have listened to our plans and really stepped up to work with us. We’re really looking forward to work with them.
“Through our refreshed leadership team, clear vision for growth, ‘right-sizing’ our cost base and our exciting new store plans – starting with Hillington in the coming months – we are looking forward to Sterling’s next 50 years with optimism and confidence.”
Since joining Sterling Furniture Group, John has appointed four new directors to his leadership team. They are:
- Kenny Barclay – Chief Financial Officer. Kenny was formerly Finance Director at Rangers Football Club.
- Matt Bonar – IT Director. Matt was previously Group Information Technology Director at the Stewart Milne Group.
- Donna MacPhee – People Director. Donna is a Human Resources and Development specialist, with experience across six different industry sectors.
- Silvia Hernandez – Commercial Director. Silvia, a global procurement specialist, is due to join Sterling next month, bringing a wealth of buying and vendor relations expertise.
The four new directors join Sterling founder George Knowles’ family members Euan and Murray Graham, who sit on the Group and Executive Boards and George Smith Knowles, who sits on the Group Board.
Viewers in Scotland can look out for new Sterling Home ads throughout July and August: the company has secured 135 coveted 10-second spots during Good Morning Britain on STV to compliment the wider Summer Sale campaign which is due to launch on July 3rd , with all their new style TV and Radio ads voiced by Two Doors Down actress Joy McAvoy.
Pictured: L to R Matt Bonar George Knowles Murray Graham Donna McPhee John Pattison Kenny Barclay Euan Graham
