FAMILY-owned Reid Furniture says it is on course to raise sales by 26% this year after signing an exclusive agreement to supply Natuzzi leather furniture north of the border.

The deal with Natuzzi will provide about half of the expected uplift, with the remainder generated through organic growth and new store openings. The firm, based at Hillington on the outskirts of Glasgow, predicts turnover in the current year will rise to (pounds) 72m from (pounds) 57m, with profits rising accordingly from last year's (pounds) 3m.

Peter Sheffield, deputy chief executive of Reid, said the Natuzzi agreement would strengthen Reid's position in its home territory, where is has some 12% of the furniture market. The company operates 17 stores north of the border, and has eight further retail outlets in Ireland, plus four in the north of England.

''This is an exciting time for the company, and we intend to take advantage of new opportunities as they arise, as well as the store roll-out programme throughout the UK and Ireland,'' Sheffield said.

Reid, Scotland's largest furniture manufacturer and retailer, is currently enjoying like-for-like sales growth of about 7%. The firm is also pushing into territories traditionally dominated by rivals such as DFS through further expansion into England.

The latest phase of the company's development programme will see Reid investing (pounds) 10m during the coming 18 months on both refurbishment and new store openings. The latest addition to its chain of outlets was in Aberdeen, but further sites in the south have been earmarked to open in the near future.

The Natuzzi group - founded in 1959 by Pasquale Natuzzi in the southern Italian town of Santeramo - designs, produces, and sells residential upholstered furniture found in 144 countries around the world. From its origins with four craftsmen, it now employs more than 3000 skilled artisans creating a range a more than 500 models of suites.

Pasquale Natuzzi said his firm was ''delighted'' to appoint Reid at the sole supplier of its leather furniture in Scotland. Like his counterpart at Reid - founder and chairman Sam Reid - Natuzzi retains control of his eponymous business.