From DKK 1,400 in the account to million profit
21/07/2023
It's been almost four years since new ownership took over the furniture company Farstrup Furniture in Søndersø on Funen and brought out the big dustpan.
Today, the 111-year-old company is in the midst of a recovery, and the owners, who in 2018 had to go on summer vacation with just DKK 1,400 in the company account , have regained their heads above water and are looking towards the future.
– Something like this doesn't happen overnight, but the process is underway and now we have become profitable instead of loss-making, which makes a world of difference, says CEO and co-owner Steen Lyhne-Johansen.
After Farstrup had been able to present losses in the millions for eight years, the new team led by COO Jan Andersen and Steen Lyhne-Johansen managed to turn the tide in 2018/19, and thus the Funen furniture company has just been able to publish its second financial report with black figures at the bottom, leading the Funen company.
– Last year we almost came out on the other side, but now we are generating money and have also obtained both a new bank connection and an overdraft facility, says the Farstrup director, emphasizing that the latter does not necessarily have to be used.
– But it provides security, in the same way that we now have a debt-free company, it says.
Contract market was closed country
Farstrup Furniture came out of the 2019/20 financial year with a gross profit on par with the previous year, while the result before tax was doubled to DKK 2 million.
– Revenue has grown less than expected, and the explanation is primarily that we lost almost three months of the year, explains Steen Lyhne-Johansen.
The furniture manufacturer derives approximately half of its revenue from retail stores, while the rest is obtained from the contract market, and both business lines suffered some hard blows this spring.
– For some months, it was virtually impossible for our dealers to enter the country's hospitals and care centers, which largely constitute our contract customers, says the Farstrup director.
And although the company, like most of the country's furniture manufacturers, experienced a boom in late summer, it was not enough to make up for the spring's losses. While others have been able to increase sales in online channels, Farstrup Furniture is dependent on sales in retail stores.
– Our furniture is very individual, and we are strong in customized solutions, where we have our justification, but conversely, it is a profession that makes it difficult to sell online, explains Steen Lyhne-Johansen.
Revitalizing an unsexy niche
According to Steen Lyhne-Johansen, the Farstrup that the new owners took over in 2017 was a kind of time capsule that needed new daylight and a dusting.
– Therefore, the exercise is largely about creating revitalization, both internally and externally, explains the director.
He points out that Jan Andersen, who is both COO and part of the ownership group, has streamlined production and optimized logistics in just a few years. Similarly, there has been a focus on restoring enthusiasm on the internal lines, including through simple measures such as a joint Friday breakfast and a greater focus on well-being, while an increased focus on product development will help bring Farstrup back into the customers' consciousness.
On the internal lines, there has been a focus on restoring the spirit, including through simple measures such as a joint Friday breakfast and a greater focus on well-being, while an increased focus on product development will help bring Farstrup back into the customers' consciousness.
– In 2017, we were largely written off by the large retailers in the contract market, but today we have delivered some really interesting projects at the country's large hospitals, says Steen Lyhne-Johansen about the successes the company has already been able to reap from the development work.
And that part in particular needs to be further improved, Steen Lyhne-Johansen asserts.
– We have some development projects in the pipeline, and going forward we are focusing on working with renowned designers who dare to challenge us and think differently, it says.
A different approach to the design of traditional functional chairs is crucial if you are to fully achieve the revitalization of Farstrup, he believes.
– Our industry is still a bit niche, and on the one hand I'm glad that we don't produce shell chairs together with a million competitors, but on the other hand you could also say that it's a bit of an unsexy niche we're dealing with – on the other hand, fortunately it's growing, the director states.
| Farstrup Furniture A/S | ||
| million DKK | 2019/20 | 2018/19 |
| Gross profit | 14.3 | 14.0 |
| Result before financial items | 2.2 | 1.2 |
| Profit before tax | 2.0 | 1.0 |
| Result for the year | 1.8 | 1.0 |
| Balance sheet total | 21.8 | 18.6 |
| Equity | 12.2 | 10.2 |
| Average number of employees | 31 | 34 |
| The financial year ended September 30, 2020. |
