Private equity pays £500m for sofa king DFS

SOFA retailer DFS is poised for dramatic expansion after being bought for an estimated £500m by private equity firm Advent International.

Lord Kirkham, who will step down as executive chairman of DFS,

predicted that the new owners could open 20 to 30 stores "quite quickly".

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Lord Kirkham, who founded DFS on a single site in Doncaster, added: "Advent's investment in DFS is undoubtedly the start of an exciting new phase in the company's development."

He said the company's staff were its most valuable asset.

He added: "It is clear to me that Advent recognises this and their plans to expand DFS will continue to offer great career opportunities for everyone.

"Their proven expertise combined with the unique DFS culture will add real value going forward."

Lord Kirkham, who will keep a financial interest in the firm, said he wanted to ensure that the people who had helped him to turn DFS into a market leader would be looked after.

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The business, based in Doncaster, operates from 74 sofa stores across the UK and employs more than 2,600 people.

Richard Baker, the former chief executive of Alliance Boots, who joined Advent International as an operating partner in August 2009, will assume the role of chairman, taking over from Lord Kirkham, who established the company in 1969.

Mr Baker said: "I am very much looking forward to building on Graham's achievements as I take on my new role as chairman of DFS under Advent's ownership.

"This is an exciting time for everyone associated with the business as it embarks on its next phase of growth. I look forward to working with chief operating officer Jon Massey, finance director Bill Barnes and the rest of the management team to continue to develop DFS' market leading position."

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Apart from his role as group chief executive at Alliance Boots, Mr Baker also spent nine years at Leeds-based Asda Stores in a number of positions, becoming chief operating officer in 2002.

He began his career at Mars Confectionery.

Andy Dawson, the director of Advent International, said: "Since founding the business over 40 years ago, Lord Kirkham has grown DFS into a best-in-class business.

"Advent's global retail experience allowed us to recognise that although the business operates in a sector which has been difficult for some retailers, DFS is unique.

"The company's relative size and reputation as market leader has

allowed it to perform well during the downturn.

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"We intend to build on these strong foundations and evolve the existing business model in order to access more customers, through new store rollout, online and brand develop-ment."

Lord Kirkham added: "Richard Baker's track record, style and approach fill me with absolute confidence that DFS will grow and strengthen under his leadership.

"I will continue to hold a financial interest in DFS and will wholeheartedly support Richard in his new role as chairman and look forward to ensuring a smooth transition of ownership."

In an interview with a national newspaper last month, Lord Kirkham had said he was "categorically not interested in selling the business" as he was "loaded" and didn't need the cash.

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Advent has been investing in the retail, consumer products and leisure sectors since 1984.

Over the last 10 years Advent has completed 25 investments in these sectors across Europe, North America, Latin America, and Asia.

Recent retail investments include Poundland and Fat Face, Charlotte Russe and Lululemon, (North America) Gerard Darel and Stokomani (France) and Takko (Germany).

Advent was advised by Quayle Munro, Hawkpoint, Weil Gotshal and Manges, Bain and Deloitte.

The roots of firm's success

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Tory peer Lord Kirkham puts the success of DFS down to the company's no-nonsense Yorkshire roots.

In a profile interview with the Yorkshire Post in 2000, he said: "I work hard, it suits me.

"I was adopted at three weeks old, we lived up the road, in the mining village of Edlington, my dad was a miner, we had proper, good working class values. That was the first stroke of luck I had."

Lord Kirkham said his charity work with organisations such as the Duke of Edinburgh Award had been spurred on by his own humble back-ground.

He is particularly keen to promote charities that work with young people.

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