Chair firm sits pretty despite downturn

Small company planning to expand

By BBC business reporter, Rachel Walton

In recent years the main creators of jobs in the economy have been small and medium sized businesses, with larger companies tending towards streamlining their workforces to boost efficiency.

A survey released on Monday by British Gas says that 55% of small and medium sized companies polled are actually planning to expand in the near future.

Recent announcements of job losses redundancies have given the impression of doom and gloom.

But firms such as The Chair Company remain cautiously optimistic, and are still spending money on expansion.

We see what might be a slowdown over the next few months as an opportunity to get slightly cheaper rents

Charles Nicholson, director, The Chair Company

The company's director, Charles Nicholson, says sales this year have been better than expected, giving him reasonable grounds for feeling positive.

"Our plan is to continue opening more shops and we see what might be a slowdown over the next few months as an opportunity to get slightly cheaper rents, so we are certainly looking to expand that way," Mr Nicholson said.

"We are also spending money on marketing, we've been improving our internet site and we are getting more and more traffic through that, which is encouraging.

"We are also creating our first brochure which, for a small company, is a significant investment and we are hoping that that will create significantly better sales."

However, one economist highlights the view that, while retailers and construction businesses have been holding up, the overall situation remains fragile.

"A collapse in consumer confidence would be disastrous for the UK economy because it is only consumer spending that has been holding up, apart from government spending as well - which is a relatively small part of total demand," says Peter Guirman, at Macroeconomics Business Strategies.

The Chair's Charles Nicholson believes 50% of his sales are directly related to the property market.

So he is banking on interest rates staying low and house prices sitting steady.