Business & Economy
ScS boss halts retirement as firm pauses dividend to fight COVID-19
April 6, 2020
The boss of a Sunderland-headquartered national sofa and flooring firm has postponed his retirement to support the business through the coronavirus outbreak.
ScS says group chief executive David Knight will remain with the business until July 2021 to help fight the present-day impact of COVID-19 and plan its longer-term recovery.
The company, which was founded in Sunderland in the 1890s, has also suspended an interim dividend payment due in May, saying it would be “inappropriate to use the cash for anything other than protecting the financial strength and resilience of the business”.
Furthermore, the firm, which closed its stores, distribution network and head office on March 24 in response to coronavirus, has confirmed a number of staff have been placed on furlough leave.
Revealing Mr Knight’s U-turn, a spokesperson said: “Given current circumstances, the board and David have agreed he will not retire before the end of July 2021.
“David is prepared to be flexible should the appointment of his successor, and a smooth handover, require a little longer.”
Speaking in an investor update today (Monday, April 6), the spokesperson also confirmed the firm’s dividend decision, which they said was partly affected by its use of the Government’s furlough support scheme.
The spokesperson added: “Our focus in recent years on building a business with increasing resilience is reflected in the strength of our balance sheet and the level of flexibility in our cost base.
“We cannot predict the impact of COVID-19 but we believe the group is as well positioned as it can be.
“(However), despite the strength of our balance sheet, the board feels it is appropriate to suspend payment of the interim dividend.
“At a time when the Government is supporting ScS, it seems inappropriate to use the cash for anything other than protecting the financial strength and resilience of the business.
“The business has moved in a swift but considered way with regards to furloughing an appropriate number of our colleagues, whilst, at the same time, maintaining customer support. We continue to monitor and utilise any further Government support that is available.”
ScS, which uses the strapline Sofa Carpet Specialist, has stores across the UK, with its North East estate including outlets in North and South Shields, Team Valley, Sunderland, Durham, Darlington and Stockton.