DFS has announced an agreement to sell the entire issued share capital of The Sofa Workshop Limited to Halo Furnishings for a total of £300,000m.
The gross assets of Sofa Workshop at 30 June 2019 were £10.2m, while the pre-tax loss in the 48 week period ended 30 June 2019 was £2.9m.
Following the disposal, DFS said it will benefit from the reduced cash costs of funding Sofa Workshop’s operating losses.
According to the group, the move will also “eliminate the potential volatility” in its profitability, and allow it to focus on “executing the significant value creation opportunities in its core activities”.
Tim Stacey, CEO, 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. 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.”
He 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.”
Tim Oulton, founder and creative director of Timothy Oulton and the Halo Group, said: “Sofa Workshop has long been a respected brand in the UK market. I am very excited to bring to it a wider range of our globally best-selling sofa designs, along with lighting and cabinet collections.
“We manage our entire creative process in-house, from perfecting leather hand-finishes in our own tannery, to hand dyeing natural fabrics, to product design, production, and customer service, and we look forward to bringing our creative passion and energy to Sofa Workshop.”