Quelle surprise. Just weeks after he ruled out a sale, saying he was ‘categorically not interested’ in selling DFS, Kirkham has done just that – to private equity group Advent.
The peer will step down as executive chairman of the business he founded four decades ago, and sell off his shares as part of the deal, which is worth £500m. His replacement is Richard Baker, former chief exec of Alliance Boots and sometime COO of Asda, to boot. Let’s hope he’s as good as shifting soft furniture as he was at moving pills, shampoo and groceries.
From humble beginnings in a billiard hall DFS now has 74 stores across the UK, more than 2,600 staff and runs three manufacturing centres for its sofas - in Yorkshire, Nottinghamshire and Derbyshire. During the recession, Kirkham proved himself to be a canny operator who managed to keep ahead in a badly hit sector as competitors like Land of Leather fell by the wayside.
New owner Advent is keen to get its hands (if not its Dralon covers) dirty, with director Andy Dawson already hinting that DFS is likely to restart expansion plans that were abandoned when the company fell back into private ownership six years ago. No lolling about on the company chesterfield for him, then.
Perhaps the most significant aspect of the deal in the wider economic context is that there was so much interest - Advent had to see off rival bidders including Cinven and Permira in order to sink its claws into DFS’s luxuriously-padded upholstery. Economic green shoots, perhaps?
It certainly looks like those analysts who see a revival of interest for good value assets in the buyout market may have a point. After all, it was only in January that Kohlberg Kravis Roberts paid a stonking £1bn for pet supplies retailer Pets at Home. And several groups are currently vying for HobbyCraft, the arts and crafts supplier, in an auction expected to top £100m.
With growth on the agenda, there are no plans for job losses at present, and new branches should mean shorter journeys for those going in search of a cheap new sofa. We’re also secretly hoping that the new owners will crank up the marketing budget so we don’t have to suffer those incredibly annoying DFS adverts anymore…
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