DFS reports "confidence" that it will survive pandemic measures

A national furniture group has said that it is “confident” about its position in response to speculation that it may be in financial trouble.

DFS Furniture, which also owns Sofology, has confirmed that it is considering its options regarding additional financing, but has stated that it can navigate its way through the pandemic.

The group announced this morning that it is in the advanced stages of negotiating an additional debt facility of up to £70m with its existing lending banks, to supplement the existing bank facility of £250m.

It said that this additional facility will cover the near-term working capital unwind until sofa deliveries can resume.

Before the closure of its stores in March, it reported that it had seen a £30m dip in revenue.

DFS confirmed in its statement that it is also reducing its operating costs after “positive discussions” with landlords and suppliers, bringing its operating cash flow to below £14m until its business is fully operational again.

It also said that its online sales have increased by 20.2 per cent over the period since its stores closed (25 March).

DFS said: “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.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →