Investor building stake in DFS in preparation for possible PE takeover

An investor in listed British retailers is reportedly focusing on furniture chain, DFS, with predictions that the Doncaster-headquartered business could be a takeover target for private equity funds.

Sky News has today said Gatemore Capital Management informed its fund investors last month that it had started building a stake in DFS, which has yet to be publicly disclosed.

DFS has a market capitalisation of just over £700m, having seen its shares rise by nearly 30% during the last 12 months.

In September, DFS said its revenues rose 47.4% on the previous year, in its preliminary results for the 52 weeks ended 27 June 2021.

Total group revenue exceeded £1bn for the first time, compared with revenues of £724m in 2020.

DFS operates from more than 180 showrooms, and has said it intends to expand the Sofology brand it acquired in 2018 as well as extend its presence in the homewares market.

Sky News reports Gatemore is understood to have had “initial engagement” with DFS’s board, which is led by chairman Ian Durant and Tim Stacey, chief executive.