The furniture firm has created 130 permanent full-time jobs across its three sofa-making factories in the UK during 2011.
The company, which operates 82 stores across the UK, has invested £2m to fund retail and manufacturing expansion, compared to zero in 2010.
UK production currently contributes 20-25% of DFS’s manufacturing output but this is set to increase after the firm created a second shift at two of its three UK-based plants.
By focusing on its UK factories in Carcroft, South Yorkshire, and Alfreton and Long Eaton in Derbyshire, DFS is hoping to cut to cut transport costs and reduce the time it takes to deliver its goods.
The Doncaster-based group said that despite the poor economic outlook, it believes it has the right strategy and team to get the business through the tough trading conditions.
In a statement released by company discussing performance for the 13 weeks prior to 29 October 2011, its first quarter 2011/12 results, DFS said sales fell 14%, down from £150m to £128m.
Underlying profits fell 43% to £8.7m, partly as a result of spending on the group’s expansion plans as DFS’s expansion is coming from its own resources and occurred within Q1.
Despite the fall in profits, a spokesperson for DFS has said it will press ahead with its future growth plans, creating 300 jobs over the coming months.
In the statement DFS said: “We increased the proportion of our sales derived from our own UK manufacturing base, by adding a second production shift at two of our three factories.”
The company added: “Additional expenditure of £0.4 million associated with this expansion was incurred during the first quarter. The investment will further increase the efficiency of our own production, improving our margins but also enabling us to shorten lead times to our customers on a larger part of our range.”
Giving its verdict of the current climate, the company stated: “Although we expect no early improvement in the trading environment, we are confident that DFS has the right strategy, proposition and team to manage the business through these tough conditions.”