FORREST Furnishing has reported a huge leap in profits after selling its Macdonald Furniture Galleries showroom on Glasgow’s Cathedral Street.
The furniture retailer booked a £3.48 million gain on the sale of the site, which has been demolished to make way for new student accommodation. It had run the store for nearly 30 years.
The sale led Forrest, which has been run by director Ken Forrest since 1972, to make a pre-tax profit of £3.69 million for the year ended December 31, accounts newly filed at Companies House reveal.
Family-owned Forrest had booked a pre-tax profit of £181,123 in its accounts for 2014.
Mr Forrest, who has been working in the Glasgow-based business since 1967, said the company had used the proceeds from the Macdonald sale to refurbish and extend the range the main Forrest showroom on Glasgow’s South Street.
All staff who previously worked at the Cathedral Street store, which had been part of the Forrest business since 1987, have transferred to South Street.
Mr Forrest said: “We were sorry to close it because it was trading well but the offer that was made was too much to refuse. The site was worth much more as student accommodation.
“It wouldn’t have made sense not to accept it.”
Mr Forrest said the investment the retailer subsequently made in South Street were paying off. The outlet is currently trading at a level equal to the South Street and Cathedral Street showrooms combined, meaning trade has not dropped overall across further to the Macdonald sale.
Mr Forrest said the the improvements to South Street site have “given us additional space to incorporate the best Macdonald range. That has actually been very successful. In fact we have been trading at virtually the same level for the company, meaning that Forrest has been doing the business of [the] Forrest and Macdonald stores. It’s actually been a very good move.”
Asked if the company would consider opening further stores in light of the Macdonald closure, which happened in May last year, Mr Forrest said it was not on the immediate horizon. “I think we are quite comfortable with what we have now. It has always been in the back of our minds to expand, but we do what we do well, and doing it from one site is easier to control. We’re happy to concentrate on the single site.”
Mr Forrest signalled his satisfaction with general trading levels, but noted that there had been a slowdown in the three or four weeks prior to the EU referendum. The uncertainty brought by the implications of the vote led the company to delay a sale by a week.
He said: “It’s been a little bit more difficult, but not disastrous by any means. In fact our sale starts next Thursday and we expect to see business shoot back up again.”
Asked whether the Leave vote was likely to bring long-term challenges for Forrest, he said: “I don’t think it is going to have a major impact on us.
"There’s unsettlement in the marketplace, in currencies and the stock market, but being an independent we can react to anything that’s thrown at us really.”
The latest accounts show turnover at Forrest rose to £8.8m over the year, up from £8.28m. Mr Forrest put the current headcount at 65, having averaged at 62 in 2015, down marginally on the 67 recorded in 2014. Overall staff costs edged up to £1.56m from £1.43m, the accounts state.
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