Thu, 27 Aug 2020 | BUSINESS SALE
Furniture retailer DFS has agreed a deal to sell its subsidiary The Sofa Workshop to Halo Furnishings as it looks to focus on its core brands. The deal, which is subject to FCA approval, will see The Sofa Workshop Ltd’s entire issued share capital sold for a total consideration of £300,000 payable in cash on completion.
In a statement, DFS explained the structure of the deal: "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."
Sofa Workshop’s gross assets as of June 30 2019 were valued at £10.2 million, while the business registered a pre-tax loss of £2.9 million in the 48-weeks to June 30 2019.
DFS Chief Executive Tim Stacey said: "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.”
Stacey added "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."
It has been reported that The Sofa Workshop will be operated by Halo Furnishings subsidiary Timothy Oulton and will be rebranded as Sofa Workshop by Timothy Oulton.
Founder Tim Oulton said: “The network of stores around London and across the UK will allow us to create easy access to a beautifully handcrafted collection of over 100 sofa models, tailor-made in unique finishes and offered in a vast array of configurations. And each store will also carry a small taste of the Timothy Oulton collection.”
The Sofa Workshop, which DFS acquired in 2013, trades from 20 standalone UK stores as well as operating an online store and concessions in some DFS stores.
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