• DFS has entered the FTSE Small Cap Index following its demotion
  • The furniture retailer’s private equity backer has cut its stake three times this year
  • Wickes owner Travis Perkins also fell out of the FTSE 100

DFS has dropped out of the FTSE 250 a month after a major shareholder slashed its stake in the retailer.

The furniture retailer has fallen out of the FTSE 250 into the FTSE Small Cap Index in a quarterly reshuffle.

In the retailer’s full-year trading update in August it said that a Brexit could lead to UK retailers facing an “increased risk of a market slowdown with additional cost pressures from foreign exchange movements”.

Confidence facing Brexit

It was thought that big ticket retailers would be adversely affected by the Brexit vote, although DFS boss Ian Filby has insisted the retailer has seen no slowdown in demand as a result of the referendum.

The retailer insisted it was “well positioned to mitigate economic headwinds” as a result of the EU referendum vote and posted strong sales and profits in its preliminary results in October.

However, this proved insufficient to mitigate the concerns of one of its shareholders.

Majority shareholder cuts stake

Private equity backer Advent, which was a majority stakeholder in the business in October last year, has since cut its stake in the business three times, most recently halving its stake to 12.1% last month.

DFS is one of four businesses to exit the FTSE 250 this quarter, although it is the only retailer.

Wickes owner Travis Perkins has also been demoted from the FTSE 100 as part of the reshuffle.

The building supplier group’s retail arm posted strong full-year sale and profits in March.

However, Travis Perkins warned in October that group profits would be low and predicted tough trading conditions in the next year triggered by uncertainty around the EU referendum and weaker demand.

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