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dfsCo 2DFS acquired the Sofa Workshop and Dwell furniture businesses for not far off one tenth of its 2013–14 interest and finance expense. Both can be key growth drivers.


Sofa Workshop — which at its peak ahead of the recession had sales of £30m from 30 odd stores — was picked up in a £5.9m deal back in the autumn of 2013


Dwell cost even less, with DFS now revealing that it paid £1m cash for the retailer, in an acquisition announced last summer.


Dependent on your standpoint, this either represents tremendous value for a brand that only three years ago had sales north of £34m or, was a premium for a business that had been in administration only 12 months prior.


To put that £1m even further into context, accounts for DFS’ ultimate UK holding company under Advent International’s ownership show the total finance expense in the year to end July was £57.5m, including £23.6m interest on senior secured notes and £29.8m interest on a parent company loan.


In announcing its return to the stock market, DFS said lowering its cost of debt was among the motivations.


The acquisitions of Sofa Workshop and Dwell for under £7m combined have contributed little to DFS’ total debt, but they can both make a big contribution moving forward for its top and bottom lines. DFS hinted as much in documents filed alongside its IPO announcement.


Both brands — while continuing to trade as autonomous businesses with their own management from their own stores and web channels — are now present online on the DFS website.


Online obviously represents a big opportunity for both brands, but the union with DFS might also be more visible in stores before long. DFS has been creating additional floorspace across its store portfolio by converting onsite warehouses.


This — it said — had released 49,000sqft of retail space across 12 stores, which would be used to sell not just more sofas and complementary, but also offered the potential for Dwell and Sofa Workshop store-in-stores.