Online DFS sales soar as shoppers go online during lockdown

Many people are spending lockdown on the sofa

The Doncaster-based firm said its online sales leapt 20 per cent between March 25, when the UK lockdown was introduced, and April 17.

The group said all of its websites have remained operational and continue to see strong momentum.

DFS said it intends to restart sofa deliveries once it is clear there is a safe and workable approach for two-person installations into customer homes.

The firm said it has put in place all the measures that are necessary and appropriate for warehouse activities to operate.

Its DFS and Sofology trading subsidiaries are receiving inbound deliveries of customer orders from Far East manufacturers and Dwell is dispatching parcels from its accessories warehouse.

The group's order banks have grown to a total of £192m from £185m.

The firm also announced that it is in the advanced stages of negotiating an additional debt facility of £60 to £70m with its existing lenders, to supplement its existing banking facility of £250m.

Analyst Greg Lawless at Shore Capital said: "In our view, the additional financing looks a sensible approach to give the company extra headroom given the uncertain outlook across the UK and no clarity on when store showrooms will reopen.

"DFS is a well-run company and has reacted quickly to put in place additional financing to see it through the current Covid-19 crisis."

The additional facility will cover the near-term working capital unwind until sofa deliveries can resume.

Alongside this additional debt facility, the company is preparing for a possible non pre-emptive equity issue of up to 20 per cent of its existing ordinary share capital, strengthening the group's balance sheet and providing resilience for a continued disrupted trading environment.

Alongside the financing actions, the company said it has made progress in reducing its monthly cash operating costs following positive discussions with suppliers and landlords, together with continued support from the Government.

The group's mitigated operating cash outflow is now expected to be less than £14m per month until the group's showrooms, manufacturing and distribution operations re-open.

DFS 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 said it is confident that the group can navigate the Covid-19 crisis and deliver its strategy over the longer term when the trading environment normalises.