National retailer Wickes has seen a considerable drop in its design and install orders this year, blaming the current “tough” market.
In its financial results covering the first six months of the year, the home improvement retailer reported its design and install orders saw a worrying 18.3% like-for-like decrease for the six-month period. This is broadly consistent with the company’s financial results from earlier in the year. At the time, the retailer blamed the decrease on “a particularly strong performance in the comparative period for the prior year”.
The home improvement retailer also reported a considerable decline in its adjusted pre-tax profits for the period were £23.4M, which had plummeted by 24.8% year-on-year from of £31.1M.
Statutory revenue across the first six months of 2024 was significantly flatter, but had still declined from the same time last year. Wickes generated £799.9M in revenue in its latest figures, which is a decline of 3.4% from 2023’s figures of £827.7M.
The business said that it had faced “significant cost headwinds this year”, blaming a rise in the National Living Wage as well as pressures from inflation. However, Wickes was confident that its planned productivity initiatives would be able to “mitigate these headwinds”, saying that it had made savings across a number of areas including “distribution and shrinkage”.
One of the few bright spots in Wickes’ latest figures was its slight uptick in DIY retail sales. The UK giant generated £633.2M in retail revenue for the first six months of 2024, which is a slight 1% rise over 2023’s revenue of £626.8M.
A significant area of financial growth for the company was its TradePro business, which had seen a 14% like-for-like rise across the financial period.
As part of its half-year reflection, Wickes also addressed its recent decision to cut 200 of its kitchen and bathroom advisor roles. The retailer explained: “In response to customer feedback about the showroom experience, we have simplified the customer journey, by ensuring that new customers are able to interact directly with a Design Consultant as soon as they begin the process, rather than speaking initially with a Kitchen & Bathroom assistant.”
In addition to “improving the customer experience”, Wickes also said that its job cuts would reduce operating costs for the business.
Despite the poor figures, Wickes said that so far, Q3 had “seen an improved trend” for the business. According to the company, like-for-like retail sales growth has strengthened, and it said that design and install business was “stabilising”.
David Wood, Wickes’ chief executive, said: “This first half performance is testament to the hard work of all our colleagues and demonstrates the strength of our balanced business model.
“We achieved further volume growth and record market share gains in Retail, with TradePro remaining a key differentiator. The market for Design and Installation remained tough during the half and Wickes was not immune; nonetheless, we have seen a positive response to our value-led Wickes Lifestyle Kitchen range, which is growing strongly.
“We are on track for the remainder of the year and have been encouraged by trading at the start of the second half. Looking further ahead, our outstanding customer offer, proven growth levers and focus on cost control leave us well-placed within a home improvement market which continues to offer significant opportunities.”