From DKK 1,400 in the account to million profit
It is barely four years since a new ownership took over the furniture company Farstrup Furniture in Søndersø in Funen and found the big dustpan.
Today, the 111-year-old company is in the middle of a rebuild, and the owners, who in 2018 had to go on summer vacation with just under DKK 1,400 in the company account , have kept their heads above water and set their sights on the future.
- Something like this does not happen from one day to the next, but the process is running and now we have become profitable instead of being loss-making, which makes a world of difference, says CEO and co-owner Steen Lyhne-Johansen.
After Farstrup was able to present a deficit in the millions for eight years, the new team with COO Jan Andersen and Steen Lyhne-Johansen at the front succeeded in 2018/19 in turning the tide, and thus the furniture company from Funen has just been able to publish its second financial statement with black figures at the bottom in front of the Funen company.
- Last year we almost came out the other side, but now we are generating money and have also got both a new bank connection and an overdraft, says the Farstrup director and emphasizes that the latter does not necessarily have to be used.
- But it gives security, in the same way as it does that we now have a debt-free company, it says.
The contract market was a closed country
Farstrup Furniture came out of the financial year 2019/20 with a gross profit on the level of the previous year, while the profit before tax was doubled to DKK 2 million. DKK
- Turnover has grown less than expected, and the explanation is primarily that we basically lost three months of the year, explains Steen Lyhne-Johansen.
The furniture manufacturer gets about half of its revenue through retail stores, while the rest comes from the contract market, and both legs of the business suffered some hard blows this spring.
- For a few months, it was virtually impossible for our dealers to enter the country's hospitals and care centres, which largely make up our contract customers, says the Farstrup director.
And although the company, like the majority of the country's furniture manufacturers, experienced a flourishing in the late summer, it was not enough to compensate for the spring's losses. Where 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 the customized solutions, where we have our justification, but it is, on the other hand, a profession that makes it difficult to sell online, explains Steen Lyhne-Johansen.
Revitalizing an unsexy niche
The Farstrup, which the new ownership took over in 2017, was, according to Steen Lyhne-Johansen, a kind of time warp that needed new daylight and a trip with the dustpan.
- Therefore, the exercise is, by and large, to create a 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. Likewise, on the internal lines, there has been a focus on reviving the spirit, among other things with the help of simple measures such as joint Friday breakfasts and a greater focus on well-being, while an increased focus on product development should contribute to getting Farstrup back into the minds of customers.
On the internal lines, there has thus been a focus on reviving the spirit, among other things by means of simple measures such as joint Friday breakfasts and a greater focus on well-being, while an increased focus on product development should help to get Farstrup back in the minds of customers.
- In 2017, we were largely written off by the large retailers on the contract market, but today we have delivered some really interesting projects at the country's large hospitals, says Steen Lyhne-Johansen about the flowers the company has already been able to reap from the development work.
And that part needs to be stepped up even further, asserts Steen Lyhne-Johansen.
- We have some development projects in the pipeline, and here we are focusing on working with recognized designers who dare to challenge us and think differently, it says.
A different approach to the design of the traditional functional chairs is essential if the revitalization of Farstrup is to be fully achieved, he assesses.
- 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 can also say that it's a slightly unsexy niche we're dealing with - to on the other hand, fortunately, it is 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 |
| The result before taxes | 2.0 | 1.0 |
| The result of the year | 1.8 | 1.0 |
| Balance sheet | 21.8 | 18.6 |
| Equity | 12.2 | 10.2 |
| Avg. number of employees | 31 | 34 |
| The financial year ended on 30 September 2020. |
