Ƶ North East furniture firm Barker and Stonehouse says it is continuing to trade profitably despite the challenges of the cost-of-living crisis, following a year in which profits more than halved.

The company, which has its headquarters in Stockton and 18 stores and franchises across the Ƶ including a new multimillion-pound Tyneside flagship shop in Gateshead, has published accounts which show turnover dipped 2.9% from £97.6m to £94.8m in the year ended April 2 2023. Operating profit dropped from £8.2m to £3.4m as it made investments across the business, including a spend of more than £5m on the Gateshead store at the Metro Retail Park, which features a green roof to protect and promote biodiversity as well a Chadwick & Co restaurant and was opened to great fanfare by actress Joanna Lumley in April 2023.

Ahead of the Gateshead opening, the company closed its store in Newcastle’s Leazes Park Road, where it has traded since 1998. The site is proposed to be demolished to make way for a Vita student housing scheme. Staff numbers dropped from 530 to 437 in the year. Total comprehensive income was £2.4m, down from £6.4m in 2022, and shareholder funds increased from £37m to £38.8m.

Despite the drop in turnover and profit for the 2023 full year, the figures are well ahead of the last pre-pandemic year’s numbers, in which it posted turnover of £77.5m and operating profit of £2.5m. During the pandemic the company reaped the rewards of pent-up demand for homeware goods, with customers flocking to its stores and website for its luxury soft furnishings, sofas, mirrors, lights, rugs, chairs and tables to kit out their gardens, living and dining rooms, and bedrooms.

Accounts for its 2021 full year showed operating profits more than doubled, and the increasing trend continued in last year’s published accounts, with operating profit jumping from £5.25m to £8.2m. The post-pandemic trend levelled out in the most recent accounts, however, although any effects of the cost-of-living crisis were yet to be felt.

In a report accompanying the accounts, directors said: “The company continues to operate retail outlets, supplying household furnishings. Turnover decreased by 2.9% as the post covid uptick played out and before the full effects of the cost-of-living increase were felt. Gross margin dropped by 1.6% during the year, reflecting further increased costs in the supply chain. Profit before tax decreased to £3m due to the slight reduction in turnover along with lower margins and increased costs.

Joanna Lumley at Barker & Stonehouse, Gateshead
Joanna Lumley at Barker & Stonehouse, Gateshead

“Cash at the year-end was £6.8m, down from £12m the previous year as the company continued to invest in fixed assets. Foremost amongst the spend was over £5m spent on the new stand-alone freehold store at the Metro Centre in Gateshead which opened in April 2023. A further £1.3m was spent on a new website which went live in October 2022 along with ongoing development on a new Microsoft ERP system which will go fully live in the first quarter of 2024.”

During the year the firm also consolidated its business arrangement with Fenwick, in which it has opened in-store concepts within the company’s department stores in Newcastle and Kingston. It also doubled the floorspace at Bentall’s in Kingston in the Autumn of 2023.

Looking ahead, the company added how it is currently “in the embryonic stages” of selling furniture on Next’s online marketplace, adding: “The company is still trading profitably since the year end despite the challenging conditions of the increased cost-of- living and much increased interest rates.”