Swedish furniture giant Nobia, which owns Magnet, reported global sales decrease of 6% SEK 2,478m (2,697) and confirmed closure of 15% of its stores in the UK.

It stated the weak kitchen market was primarily due to a decline in the project market across all regions, but the consumer market showing signs of recovery with an increase in design appointments.

In the UK, Nobia sales were static, with the growth in consumer sales unable to compensate for a “substantial” decline in trade and project sales.

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Net sales in the UK region amounted to SEK 1,195m, down from SEK 1,208m in 2023,  while gross profit was SEK 454m against SEK 477million last year.

The gross margin also fell to  38.0% from 39.5% in Q3 of 2023.

In a supporting statement, president and CEO of Nobia Kristoffer Ljungfelt said: “Total net sales in the UK remained flat compared to last year, despite a substantial decline in volume due to weaker trade and project sales.

“Growth in consumer sales was not enough to compensate for the loss in volume, which resulted in under absorption in our supply chain.

“Gross margin fell in the quarter due to lower volumes and lower average order values in the consumer channel.

“To improve gross margins, we are adjusting our product offering to strengthen average order values.”

Earlier this year, and as part of a UK business transformation to an “asset light model”, the company reduced manufacturing sites and proposed closure of underperforming Magnet stores.

Kristoffer Ljungfelt continued: “The cost reduction initiatives implemented earlier in the year generated savings according to plan.

“Significant effort has been dedicated to transitioning our UK business to an asset-light model.

“We have now managed to step out of unprofitable project business, reduced our manufacturing sites from 5 to 2 and closed about 15% of the store network.

“Whilst a lot has been done we still have more to do and are evaluating additional actions, including a further review of the store network.”

Nobia recently opened its first UK franchise in Tunbridge Wells, Kent, reflecting its business in the Nordics with 150 franchise stores.