Home furnishings retailer Gillies of Broughty Ferry has reported a fall in profits after a “difficult” year.
The company can trace its roots in the Dundee area back to 1895 when cabinetmaker and upholsterer James Gillies set out on his business journey.
Today, in addition to its flagship Ferry store, it has outlets in Perth, Aberdeen, Inverness and Dingwall as well as owning Grampian Furnishers in Elgin.
Newly filed accounts show its sales edged up from £24.5 million to £24.6m for the year ending August 31 2023.
However, significant increases in costs meant pre-tax profits for the multi-generation family business fell from £2.9m in 2022 to £2.1m last year.
Gillies managing director on challenging year
Managing director Ian Philp said the board was “satisfied” with the results in the face of significant business pressures.
These include rises in the cost of energy and wages for the company’s 201 staff while it also felt the impact of a slower housing market.
Mr Philip said: “2023 was a difficult trading year with consumer confidence affected by high inflation and a depressed housing market, a key driver for the business, impacted by higher mortgage rates.
“Trading in the current financial year remains difficult.
“But I believe that with our offering and the talent of our people we are well placed to the steer the business through the challenges that we face.”
Profits down but Gillies keeps investing
The company said the war in Ukraine was also continuing to impact confidence and energy prices.
With this in mind, it invested heavily in solar panels, including new installations at Grampian Furnishers and its flooring warehouse in Dundee.
It also invested in creating a mezzanine floor at its central distribution warehouse in Dundee, which increased the company’s warehousing capacity.
Gillies said it would continue a programme of investments in its stores.
The accounts, signed on behalf of the board by finance director Tom Rodgers, add: “Trading conditions proved difficult given the impact of the war in Ukraine on the general economy, which brought about cost-of-living challenges for consumers, in turn impacting on confidence and on rising supplier and in particular energy price for our business.
“Despite such difficulties, the close involvement in the day-to-day operations of the business of our board of directors allowed us to react quickly to threats and opportunities as they arose.
“This approach contributed to a rise in gross margin year-on-year.
“Inflationary pressures were, however, brought to bear on many of the company’s costs, in particular payroll costs.”
Gillies closed its Montrose store in March this year after 13 years in the Angus town.
At the time it said rising costs were behind the decision.
Building trade supplier Screwfix will move into this unit at New Wynd, creating 12 jobs.
