ScS Upholstery's profits melt as temperatures soar to record levels

Furniture stores have become the latest no-go high street area in the current heatwave, prompting ScS Upholstery to issue a profit warning.

The Sunderland-based company, which makes sofas and armchairs, said people were shunning their living rooms to seek respite from the heat outdoors.

Customers were more likely to splash out on a new set of garden furniture than a big-ticket item such as a sofa, ScS said, adding: "The record breaking hot weather over the last few weeks has had an inevitable effect on trading."

Its warning comes just days after Greggs, the baker, blamed the hot weather for poor sausage roll sales. Analysts said other warnings would follow, with the nightclub operator Luminar tipped as another business likely to have suffered from the heatwave.

ScS's admission yesterday that profits before tax would be "slightly below" City expectations sent its shares down 6 per cent to 256p, as the market ignored the company's reassurance that 2003 would still be another year of record profits. Collins Stewart, ScS's house broker, cut its pre-tax profit forecast to £11.3m from £11.8m.

"People are still concentrating on the outdoors and not concentrating on their lounges - because there's no sea and sand and no parasols," David Knight, SCS's chief executive, said.

The company, which has a 4 per cent share of the upholstery market, said its like-for-like sales order intake was 2 per cent lower, although it said excluding the effect of the buoyant first six weeks of opening 11 new stores in the previous year, underlying like-for-like sales were 2 per cent stronger. The temperature hit a record 100.6F on Sunday, making it the hottest day since records began in 1659, although it has since turned cooler.

Mr Knight said he was unfazed by the sales trend. "We know it's just a blip because five weeks ago we had a really rainy weekend and the customers were there.

"They liked the product, liked the offer and liked the staff. We're just waiting for the weather to break and then all that pent up demand to spend money on the house will return".

He said the company was still on track to expand its estate to 70 stores by the end of 2004, up from 55.

Rhys Williams, a retail analyst at Seymour Pierce, said: "We do not believe the poor trading conditions for household goods is purely as a result of the weather.

"We believe weaker conditions will continue into the new year."

Separately, Carpetright, which sells floor coverings, said trading had been in line with expectations so far this year. This was "despite a difficult trading environment for floor coverings", it added.