Merger of major furniture companies given the green light
The merger of Doncaster-based DFS Furniture and Sofology has been given the go ahead by the Competition and Markets Authority.
The CMA has decided not to refer the merger to a phase two investigation under the provisions of the Enterprise Act 2002; therefore giving the it the green light to proceed.
Earlier this year, DFS acquired Sofology, which has its headquarters in Warrington, for £25m. Today’s decision by the CMA means the acquisition will now complete on 30 November. DFS anticipates taking on the 40 Sofology stores in FY18.
DFS CEO, Ian Filby, said: “I’m delighted that we are able to complete this deal, which is a big step for DFS towards achieving one of our strategic growth aims of broadening our product and brand appeal. Sofology is a fantastic business that takes great pride in the levels of service and innovation it provides to customers and is a great addition to our family.
“This is an important and historic moment for both businesses, our investment demonstrates the confidence we have in Sofology and the wider Group. I look forward to working with Jason Tyldesley and his team to continue this success.”
Sofology’s revenues stood at £143m in 2016 and it made an EBITDA loss of £2.7m.
DFS last month published its preliminary results for the year to 29 July, which showed that despite gross sales growing by 1% to £991m and revenue standing at £762m, the firm had been impacted in the second half of the year, reducing revenues and profit.
At the time, Filby said the UK furniture market continued to be very challenging and the outlook for the sector remained uncertain. However, the firm had seen a satisfactory order intake since July.
As well as the Sofology deal, DFS has recently agreed a licensing partnership with the British lifestyle brand Joules.
DFS has manufactured and sold living room furniture in the UK for 48 years and now operates a retail network of stores in the UK and Europe, together with an online channel.
Sofology operates 40 stores in the UK. The business was founded in 1974 by Brian & Margaret Tyldesley, who set-up Clayton Sales Rooms, which became CSL and finally Sofology in 2016. CEO Jason Tyldesley has led the business since 1996.