Doncaster-based DFS Furniture said on Thursday it agreed to sell The Sofa Workshop Limited to Halo Furnishings Limited for about £300,000.

“The gross assets of Sofa Workshop at 30 June 2019 were £10.2m, the loss before tax in the 48 week period to 30 June 2019 was £2.9m,” said DFS.

“The business is being sold on a cash, working capital and debt free basis.

“Following the disposal, the group will benefit from the reduction in the cash costs of funding Sofa Workshop’s operating losses, elimination of the potential volatility in the profitability generated and it will allow the Group to focus on executing the significant value creation opportunities in its core activities.”

DFS CEO Tim Stacey said: “Over the course of the past few months we have reviewed our strategy and plans across the group with a focus on ensuring our brands are in the best possible position to support the group in maximising its return on capital. 

“After careful consideration, we have decided to sell Sofa Workshop to Halo.

“This transaction represents a great opportunity for Sofa Workshop and I’d like to thank all our colleagues for their hard work and commitment since the business was acquired by the group seven years ago and wish them every success in the future.

“We will remain focused on the core elements of our strategy, namely accelerating investment in technology and omni-channel initiatives for our two scale brands, DFS and Sofology, while ensuring our complementary Dwell brand generates a consistent return.

“As the clear market leader with strong recognition of our brands, high showroom sales densities and advantageous vertical integration, we feel well-positioned to drive shareholder returns.”