ScS finance chief quits as sofa group bounces back

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The Independent Online

Scs Upholstery, the sofa group that unearthed a £2m black hole in its accounts in December, yesterday parted company with its finance director as it unveiled a pick-up in trading.

Sasha Beere had resigned from the retailer's board but intended to remain as finance director until a replacement was found, the company said. He will not be entitled to receive any compensation.

Mike Browne, the executive chairman, denied that Mr Beere's decision to leave was connected to the group's spate of profit warnings late last year that culminated in the discovery of accounting errors and a 12 per cent fall in pre-tax profits. "He is leaving for personal reasons, which I respect. Life goes on and he will be very much involved in the business until we find a successor," Mr Browne said.

The group's auditor, Ernst & Young, is investigating the drop in profitability, which was blamed on a clerical error in the way ScS accounted for give-away leather protection kits.

At the company's annual meeting, Mr Browne told shareholders that consumers had flocked to its shops during the January sales. Its underlying sales order intake rose 6 per cent over the past two months, defying analysts' qualms that rising interest rates would put people off big-ticket items such as sofas.

Mr Browne said he saw "no reason" why the company would not be able to sustain the accelerating sales trend during the rest of the year.

However analysts were less confident. Iain Macdonald, at Numis Securities, said: "The market is going to get a lot tougher. I don't think its performance will continue." He cited the wealth of new entrants into the upholstery market, such as MFI, Homebase and Matalan, and the likelihood that rival DFS, which last week issued a profit warning, would fight to regain lost market share.

ScS plans to open five new stores in its second half, taking its portfolio to more than 60.