DFS Furniture today announced its intention to proceed with an initial public offering of its ordinary shares.
The homeware retailer reported strong sales in its first quarter results on December 23, which has continued into 2015. DFS gross sales for the first 26 weeks of the financial year, ending on 31 January 2015, were up 9% before including incremental sales from Sofa Workshop and Dwell. Order intake in the important trading period from Boxing Day has also been positive compared to the prior year and in line with its expectations. This performance underpins the Board’s confidence that DFS enjoys positive prospects for the current year and for long term profitable growth.
Ian Filby, CEO of DFS, said:
“DFS is firmly established as the UK’s leading retailer in upholstered products across all customer segments. We aim to offer our customers the widest range of sofas in the market with the best value at every price point, whilst also providing an exceptional customer service proposition. The success of our model is proven by our 45 year track record, during which we have increased our market share and sales.
Our vision is to take DFS from being a great British business to a world class business. This is an exciting time for us as we continue to drive growth initiatives that are already underway against a backdrop of an improving macroeconomic environment. We see significant opportunity to further increase the Group’s penetration in the UK, strengthen our position as the market leader for online upholstered furniture sales and we recently entered Continental Europe with the opening of our first store in the Netherlands.
In recent years and under Advent’s ownership we have invested substantially in the infrastructure of our business to create a robust platform to support our future growth plans. We have a track record of strong financial performance, including consistently strong cash generation, which has enabled us to deliver outstanding shareholder returns. We look forward to continuing to grow profitably in a new period of public ownership.”
Richard Baker, Non-Executive Chairman of DFS, added:
“I am proud of what we have achieved at DFS since 2010 and excited about what the future holds. The Group has a compelling business model that is highly cash generative, has clear growth prospects, a very strong executive management team together with well-trained and motivated employees. The Board collectively brings a blend of highly valuable and wide-reaching experience. I remain confident that we have a best-in-class board capable of leading and supporting the Group in the execution of its strategy.”
Almost all of the upholstery products are made-to-order and, as a result, DFS does not trade from stock and is exposed to minimal inventory risk. This, combined with other factors such as scale and specialism, allows it to have the broadest upholstery product range amongst national furniture retailers in the UK market, in terms of styles across various price points.
DFS is a leading retailer of upholstered furniture in the UK, with a 25.7% share of the £3bn upholstered furniture market in 2014, according to retail consultants at Verdict. This share was over three times that of any other upholstered furniture retailer.