DFS in advanced talks regarding additional financing
DFS has confirmed that it is in the advanced stages of negotiating an additional debt facility as it looks to boost its finances due to the coronavirus pandemic.
The sofa retailer said the funds of between £60 million and £70 million will supplement its existing bank facility of £250 million.
In addition, DFS is considering a possible equity issue of up to 19.9% of its existing share capital. This will help to strengthen its balance sheet and provide “resilience for a continued disrupted trading environment”.
In a trading update, the retailer said its websites have remained operational since the government enforced closure of its stores last month. From 25 March to 17 April, its gross online sales rose by 20.2% which has resulted in its order banks growing to a total of £192 million from £185 million.
DFS said it is still receiving inbound deliveries of customer orders from Far East manufacturers and will restart sofa deliveries once it can implement a safe and workable approach for two-person installations into customer homes.
Looking ahead, the company 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.”
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