Q&A: DFS chief executive Ian Filby

Sales were down but profits up in the year. Are you encouraged by the performance?

We’re feeling very positive. 2011 was really tough, and 2012 is proving to be equally as tough, but no worse.

13 stores were opened in the year yet sales still slipped. Why?

There was a delay between opening the stores and seeing the sales [rise]. Sales in the second half were up 6.6% and there was a bit of like-for-like growth in the second half. They were marginally up.

The key thing is sales coming from the new estate. That will be the key driver of growth.

Why was trading in the first half so much tougher than the second? [Sales fell 10.3% in the first half and rose 6.6% in the second half]

There was a loss of consumer confidence that drove a market share decline in the sector.

It was in line with what we were expecting. We’re confident we have grown market share in 2011 and increased that in 2012.

How has the business performed since year end?

A lot of retailers will have had tough times in July and August and a lot of retailers’ trade will have bounced backed in September and October. 2012 is a very similar year to 2011.

How do you think next year will play out?

It will be more of the same. For us the upside of working our costs in 2011 has meant we could structure a budget that doesn’t account for market growth.

What costs have you taken out of the business?

The key one is the marketing budget. We weren’t using our buying power. The appointment of Mediacom in 2011 has started to kick in. We’ve actually slightly increased the impact of our advertising in terms of eyeballs and eardrums, but done that at considerably less cost.

DFS has significantly changed the style of its advertising to a more lifestyle feel. Is it working?

We’re very comfortable with the new advertising style. It’s certainly putting bums on seats in our stores. What we’ve attempted to do is communicate with the decision makers – and this is on the whole is women. We’ve probably broadened our appeal too.

What are your plans for online?

We’ve committed to investing in a much more cross channel offer. The new app, launched three to four weeks ago, I think is industry leading. And the iPads in store are creating a proper dialogue [between shoppers and shop staff]. It’s one of the many improvements we have planned through the medium.

You can already transact thought the web on some products. But it’s not a major part of the arsenal going forward

How is the Dublin store trading?

It’s surpassed expectations. We’re very happy with our first foray into Ireland and are now actively looking for our second store.