DFS has raised £64m in its equity fundraising round, which the furniture retailer said will give the business headroom should the lockdown last “to December 2020”.
The furniture retailer has raised the additional funds through a share placing, which represents nearly 20% of the firm’s issued ordinary share capital prior to the placing.
Barclays and BNP Paribas are acting as joint global coordinators and joint bookrunners for the placing and members of the executive team, including chief executive Tim Stacey, have also snapped up additional shares. Stacey bought an additional 15,000 shares alongside six other directors who bought shares in the equity placing.
DFS has also received credit approval for a new 12-month bank facility of £70m from its existing lending banks.
The furniture retailer has said these additional funds will give it “liquidity headroom through a pessimistic scenario of a lockdown to December 2020, followed by a historically weak sofa market”.
DFS has suspended manufacturing and two-man distribution operations across its store estate, as well as closing stores as mandated by the government, but online gross sales orders have risen 24% in the period from March 25 to April 19.
Stacey said: “The mitigating actions we have taken in response to Covid-19, alongside the new financing arrangements and placing, significantly increase the financial resilience of DFS for the months ahead.
“Alongside these actions, we also greatly appreciate the support and efforts from our loyal employees, committed suppliers and understanding landlords.
“Working together, we have made as much progress as possible to navigate these challenging times. While the outlook remains uncertain, DFS is well placed to navigate the coming months and the board remains positive about the long-term prospects of the group.”
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