Furniture and homewares retailer Gillies of Broughty Ferry battled a squeeze on margins as profits dipped 16% last year, it has been revealed.
Accounts posted at Companies House showed the company increased turnover by 2% to £15.35 million during the 12 months to August, with its four stores in Broughty Ferry, Montrose, Perth and Aberdeen all showing “encouraging sales, growth and results”.
But pre-tax profits fell back to £1.24m, with directors saying the trading surplus remained “fairly consistent to the achievements of previous years” despite a small reduction.
Investment income also declined after the maturation of a three-year policy during the previous period.
Gillies’ managing director Ian Philp said the company was working in a “very competitive area” and that margins had been impacted by market forces.
But he stressed that the company continued to reinvest in its premises and staff in an effort to provide the best possible service to customers.
A full revamp of the carpet and bedding departments was undertaken at the firm’s home store in Broughty Ferry during the year in question, while a major expansion and redevelopment of the group’s Perth outlet was finished in October.
The extension, on the site of the city’s former British Legion club in Skinnergate, included Gillies’ first caf which is expected to prove popular with customers and have a significant impact on trading.
“We opened the new extension in October 2013 and early indications are that it is trading very successfully,” Mr Philp added.
“It has enabled us to increase our product offer substantially and the coffee shop is carving out its own niche in the marketplace and helping to attract new business.”
The directors noted customers’ “excitement and positive feedback” over the changes in their report, and said they were confident the new facilities would “achieve impressive results over the years that follow.”
It even played its part during last week’s celebrations of St Johnstone’s Scottish Cup win, with football fans queuing to get into the upstairs caf so they could get a better view of the club’s victorious players and the famous old trophy on their open-top bus tour.
The second floor of Gillies’ store in Aberdeen’s Holburn Street is currently undergoing renovation, with a crane even being employed to lift a new roll of carpet into place during the early hours of the morning earlier this week.
Steps are also being taken to improve the company’s carbon footprint, with all lighting across its estate switched to low-voltage bulbs.
Mr Philp also hailed the impact of the company’s workforce, which rose slightly to a monthly average of 142 during the period.
“We have extremely good staff and we do thank them all for their extremely hard work and their commitment,” he added. “They are the company’s biggest asset.”
Directors said a £640,000 deficit in the firm’s defined benefit pension scheme would be fully repaid by early 2016 under a recovery plan.
The family firm can trace its history back to 1895, with a fifth generation now firmly established in the business.