Statement re Press Comment

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

20 April 2020

DFS Furniture plc

Statement re Press Comment

DFS Furniture plc (the "Company" and together with its subsidiaries the "Group") notes recent press comment about the Company considering its options with regard to additional financing.

On 25 March 2020, the Company provided an update on its actions in response to the COVID-19 pandemic. This included the intention to seek additional financing facilities and other cash conservation and liquidity measures.

Additional financing

The Company confirms that it is in the advanced stages of negotiating an additional debt facility of £60m-£70m with its existing lending banks, to supplement the existing bank facility of £250m. This additional facility will cover the near-term working capital unwind until sofa deliveries can resume.

Alongside this additional debt facility, the Company is preparing for a possible non pre-emptive equity issue of up to 19.9% of its existing ordinary share capital, further strengthening the Group's balance sheet, and providing resilience for a continued disrupted trading environment.

Further updates will be made as and when appropriate.

Progress on cost mitigation

Alongside the financing actions, the Company has also made further progress with regards to reducing its monthly cash operating costs following positive discussions with suppliers and landlords, together with continued support from the Government. The Group's mitigated operating cash outflow is now expected to be less than £14 million per month until the Group's showrooms, manufacturing and distribution operations re-open.

Update on trading

Since the announcement made by the Company on 25 March 2020, the Group's websites have remained operational and continue to see strong momentum, with dfs.co.uk online gross sales up by 20.2% over the period from 25 March 2020 to 17 April 2020. Consequently, the Group's order banks have grown to a total of approximately £192m from approximately £185m.

The Group has in place all measures that are necessary and appropriate for warehouse activities to operate. Its DFS and Sofology trading subsidiaries are receiving inbound deliveries of customer orders from Far East manufacturers, and Dwell is dispatching parcels from its accessories warehouse. The Group intends to restart sofa deliveries once it is clear there is a safe and workable approach for two-person installations into customer homes.

Outlook

The combination of the proposed additional financing together with the operating cost mitigation measures is expected to, when agreed, give the Group significant liquidity to see through an extended lock-down. The Board is confident that the Group can navigate the COVID-19 crisis and deliver its strategy over the longer term when the trading environment normalises.

For further information, please contact:

Important notices

This announcement contains inside information and is issued on behalf of the Company by Mike Schmidt, Chief Financial Officer.

There can be no certainty that any possible transaction contemplated in this announcement will proceed nor as to the terms on which any possible transaction might be concluded. This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

No securities in connection with any possible transaction contemplated in this announcement have been or will be registered under the U.S. Securities Act of 1933, as amended, (the "Securities Act"), and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.