DFS warns it may axe jobs within its Sofa Workshop and Dwell outlets

JOBS could be under threat at DFS in Belfast as the retailer braces for annual losses after a £271 million sales hit from lockdown.

The sofa chain, which employs 5,500 staff, has warned it may axe up to 200 jobs across its Sofa Workshop and Dwell outlets.

The move could affect the Dwell outlet on Belfast’s Boucher Road.

DFS said it is making a "targeted reduction" of roles amid an overhaul of the two brands.

The warning came as it said revenues slumped to around £725m in the year to June 28 after it was forced to freeze deliveries for most of its final quarter due to the coronavirus pandemic.

DFS said: "Reflecting the challenging outlook for our market, we are taking necessary actions to preserve our future competitiveness.

"We have commenced an operational restructuring of Sofa Workshop and Dwell to improve the returns generated by those brands."

DFS said it expects pre-tax losses of between £56m and £58m for the year as a result of the delivery pause.

But the group said sales have bounced back strongly since stores reopened in May - soaring 69 per cent year on year.

"We believe this performance materially benefited from latent demand from customers that would otherwise have completed purchases in late March, April or May and, given the wider economic uncertainty, we remain cautious on the outlook for demand," the group added.

It said online sales have remained strong even though stores are now open, up 77 per cent year on year from the start of the lockdown until July 12.

The restructuring across its Dwell and Sofa Workshop brands, which was first revealed in March, comes after the group furloughed 5,000 staff amid the lockdown.

It said this government support, together with the business rates holiday, only partly offset the "substantial losses that we have incurred due to the business suspension".