Last checked at 27 Aug 2020 07:00
27 August 2020
DFS Furniture plc ("DFS" and the "Group")
Sale of The Sofa Workshop Limited
Class 2 Transaction Announcement
DFS Furniture plc announces that one of its subsidiaries, DFS Furniture Company Limited, has entered into an agreement to sell the entire issued share capital of The Sofa Workshop Limited (the "Company", trading as Sofa Workshop), a wholly owned subsidiary and premium UK sofa retailer, to Halo Furnishings Limited ("Halo").
The deal is conditional on regulatory approval from the FCA which is in progress and is expected to be received in due course.
The gross assets of Sofa Workshop at 30 June 2019 were £10.2m, the loss before tax in the 48 week period to 30 June 2019 was £2.9m. The business is being sold on a cash, working capital and debt free basis. 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 £0.3m payable in cash on completion1
Tim Stacey, CEO commented:
"Over the course of the past few months we have reviewed our strategy and plans across the Group with a focus on ensuring our brands are in the best possible position to support the Group in maximising its return on capital.
After careful consideration, we have decided to sell Sofa Workshop to Halo. This transaction represents a great opportunity for Sofa Workshop and I'd like to thank all our colleagues for their hard work and commitment since the business was acquired by the Group seven years ago and wish them every success in the future.
We will remain focused on the core elements of our strategy, namely accelerating investment in technology and omni-channel initiatives for our two scale brands, DFS and Sofology, while ensuring our complementary Dwell brand generates a consistent return. As the clear market leader with strong recognition of our brands, high showroom sales densities and advantageous vertical integration, we feel well-positioned to drive shareholder returns"
About Halo
Established in 1976 in the United Kingdom and 2004 in Asia, the Halo Group is a world leader in the luxury furniture and lifestyle market. Halo operates in distinct but integrated segments in wholesale and retail as well as the interiors project space. It has several brands including Timothy Oulton, Noble Souls, Outlaw, Bleu Nature and Freehand among others.
1 In the event Halo subsequently sells the Company or substantially all of its assets (whether directly or via the sale of another Halo group company) within 18 months of acquisition up to £2.5m of additional consideration could be payable depending on the proceeds of sale.
Enquiries:
DFS (enquiries via Tulchan)
Tim Stacey (Group CEO)
Mike Schmidt (Group CFO)
Liz McDonald (Company Secretary)
Phil Hutchinson (Investor Relations)
Tulchan
James Macey-White
Jessica Reid
Amber Ahluwalia
+44 (0)20 7353 4200
dfs@tulchangroup.com
About DFS Furniture plc
The Group is the clear market leading retailer of living room furniture in the United Kingdom. We design, manufacture, sell and deliver to our customers an extensive range of furniture products. The business operates an omnichannel retail network of living room furniture showrooms and web sites in the United Kingdom and other European countries, trading through three leading brands. The Group has been established and developed gradually over 50 years of operating history. We attract customers through our substantial and continued investment in nationwide marketing activities and our reputation for high quality products and service, breadth of product ranges and price points and favourable consumer financing options.