No rest for Sofa.com as online retailer seeks buyer

Sky News has learnt that the owners of Sofa.com have hired KPMG to identify a buyer.

LGT European Capital, which took control of Sofa.com last year after having been a lender to the business, is understood to be seeking to secure a change of control within weeks.

The sale process comes despite people close to the company insisting that it recently enjoyed its best-ever trading week, with sales up 30%.

Sofa.com is chaired by Justin Stead, the former boss of the jewellery retailer now called Watches of Switzerland Group.

A potential sale of the site comes during a protracted period of turmoil for the retail sector, with both online and high street businesses affected.

Asos, the fashion darling of Britain’s digital retail sector, announced a surprise profit warning shortly before Christmas, while this month’s flurry of festive trading updates has represented a mixed bag for an under-pressure industry.

DFS, the furniture retailer, said it had enjoyed a strong Christmas in terms of sales, with underlying growth of 10%, including a 22% rise in online gross sales.

LGT became the majority shareholder in Sofa.com last April, with the business previously having been owned by CBPE, a private equity firm.

In its accounts for the year to 28 February last year, Sofa.com Topco said its “trading performance in the year [had] been impacted by uncertain market conditions”.

The company reported flat turnover of £28.8m and an operating loss of £33.6m, more than double the previous year’s loss.

Sofa.com is expected to have been impacted by the administration of House of Fraser and subsequent closure of a number of its outlets amid plans to roll out Sofa.com concessions across the department store chain.

According to the accounts, a debt-for-equity swap was carried out last summer to reduce the company’s debts by nearly £60m.

A number of parties are understood to have informed KPMG of their interest in a potential acquisition of Sofa.com.

The value of any takeover was unclear on Thursday.

A spokeswoman for Sofa.com declined to comment.

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