LONDON: Handmade designer of rugs and soft furnishings retailer The Rug Company has reported a fourth straight year of flat sales, with turnover remaining over the £12m threshold. According to its latest filed accounts for the year ended 3 April 2016, total sales were slightly down by 2.3% to £12.3m from £12.6m, but remained broadly flat due to growth within its franchise network being offset by ‘difficult trading conditions’ in the UK.
Sales within its core UK market fell by 5.7% to £9.9m from £10.5m, as did sales within its Russian market, down by 17.7% to £343,680 from £417,232. The rest of the EU saw sales grow by 20.7% to £808,250 from £669,995, whilst North American and the rest of the world also grew revenues by 42.1% to £739,102 and 2% to £507,040 respectively. Within its franchise network, sales rose by 10% to £2.2m, whilst Retail sales fell marginally by 4.7% to £10m. Gross profit fell by 5.6% to £6.7m from £7.1m, whilst pre-tax profit also reported a slight reduction, down by 27.7% to £2.6m from £3.6m recorded in 2015.
The Rug Company highlighted that gross margin had fallen due to increased costs in continued investment within its infrastructure to support new locations and overseas growth. Established since 1997, The Rug Company collaborates with designers and trades through three London showrooms in the UK and franchised stores throughout Europe, the Middle East and North America.
