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(Alliance News) - DFS Furniture PLC on Thursday said it will offload its Sofa Workshop high street chain to retailer Halo Furnishings Ltd for GBP300,000.
The furniture retailer said it will reap the rewards of reduced costs by disposing of loss-making Sofa Workshop in a sale which is expected to receive regulatory approval in "due course". Sofa Workshop posted a pretax loss of GBP2.9 million in the 48 weeks to June 30, 2019.
"Following the disposal, the group will benefit from the reduction in the cash costs of funding Sofa Workshop's operating losses, elimination of the potential volatility in the profitability generated and it will allow the group to focus on executing the significant value creation opportunities in its core activities. The total consideration for the transaction is GBP300,000 payable in cash on completion," DFS said.
DFS could land GBP2.5 million in additional consideration from the deal however, should Halo sell Sofa Workshop "or substantially all of its assets" within the next 18 months, depending on the proceeds of the sale.
Shares in the company were 0.4% higher at 163.58 pence each in London on Thursday morning.
By Eric Cunha; ericcunha@alliancenews.com
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