Sterling Furniture Group continues to strip out costs in the business after reporting another year of losses blamed on a mix of higher taxes, wages and challenging trading conditions.
The company renegotiated supplier contracts, cut headcount and introduced more technology to reduce overheads, but says cost pressures have continued into the current year.
In recently-filed accounts for the year to the end of August last year it said it “entered the year “carrying an overhead structure configured for a growth plan that did not materialise.”
The board said it “rebuilt that structure, taken over £2.6m out of the annual cost of running the business, and retained ownership of the majority of the retail and distribution estate against a very low level of borrowing.
“The directors took decisive action rather than defer it, completing the work within the year rather than spreading it over a longer period.
“The reported result therefore absorbs significant one-off restructuring costs. With continued challenging trading conditions and suppressed customer demand, coupled with significant external cost pressures, the reported loss before tax and exceptional items for the year was £3,442,947 (2024: loss of £3,503,621).’
Turnover fell by 7.9% to £46.6m, with the company closing its loss-making store in Dundee in June last year. Excluding Dundee, like-for-like delivered sales declined by 6.1%.
The average headcount fell to 377 from 441, with staff costs dropping to £13.9m from £14.8m.
Former Rangers managing director Stewart Robertson was brought in as chief executive in December 2024, shortly after Bernard Dunn, a former head of insurance broker TL Dallas, was appointed chairman.
Malcolm Walker became an adviser to the board, with responsibility for buying and merchandising. Gillian McCormick joined the company as head of finance in May 2025 and was subsequently appointed company secretary.
A number of other appointments and internal promotions were made to the executive management team.
However, the company said market conditions remain challenging and the reductions in overhead costs will continue into this financial year.
“Since the year end, the market continued to be challenging,” said the company. “Cost pressures arising from global events, government changes to minimum wage levels and flat consumer demand across the retail sector have continued to affect the sector as a whole.
“Notwithstanding those conditions, the actions taken during FY25 have delivered an improved result in the current financial year to date.”
The board said it had implemented further efficiency measures during FY26, “the benefit of which will be felt in full in FY27”.
Prospects for the current and future years rest on the reset of the cost base and refurbishment of the estate behind Sterling Home. It trades from nine stores across Scotland, including its flagship showroom in Tillicoultry.
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