By Aimee Chanthadavong

While sales for Nick Scali in the second quarter for the first half year to 31 December 2010 deteriorated, trading conditions during the half year was “well”.

It was so well that the furniture retailer reported sales revenue of $49.3 million, a 13 per cent increase on the previous corresponding half. However, net profit after tax slipped by $0.5 million to $8.4 million.

The company said the last two to three months particularly subdued as consumers reacted to speculations of interest rate rises.

Chief financial office David Clarke told RetailBiz despite the volatile retail environment, Nick Scali continued to stay on top of its game.

“The strategies we used were a mix of strong promotion products and very good product offering and choosing the right product. In the second quarter, we found anything we did was difficult as people were not going shopping. But we still did a lot marketing during that period but still we didn’t really get much reaction,” he said.

Committing to a previous company announcement, Nick Scali will introduce a second retail brand, Sofas2Go, this financial year. It will focus exclusively in a market segment below that of Nick Scali Furniture brand.

“We believe there are strong opportunities within the first home buyer and renters segment that we don’t think is being served well. And it will be a market segment that the Nick Scali brand doesn’t usually prey into,” Clarke said.

The smaller store format of Sofas2Go will allow for more rapid network expansion with the first store expected to open by April 2011

“We’re opening our first group of three to four stores in Sydney and while we bed the brand down in Sydney then we’ll expand nationally.”