Our two columnists Lord Kirkham and Malcolm Walker are great pals and right now they’re somewhere in the Arctic having visited the North Pole. Assuming that Champagne doesn’t freeze at those temperatures, they’ll be celebrating with a glass of something now that the will he wont he saga of whether Kirkham will sell DFS has come to an end.
Remember Kirkham said a few weeks ago that he wouldn’t be selling as he was “loaded”, but clearly Advent wanted it pretty badly and must have made him an offer he couldn’t refuse. Certainly there seems to be a lot of private equity money waiting to be spent at the moment - we’ve just revealed the imminent sale of Hobbycraft to Bridgepoint too.
The big challenge facing the bidders for DFS was whether you had a business without Kirkham. Putting in place such a renowned retailer as former Boots boss Richard Baker as chairman answers that question. DFS is very traditional - that’s one of its strengths - but the sale gives it the opportunity to modernise and broaden its appeal and Baker has a great retailing brain which will have already zeroed in on the opportunities open to DFS.
What will be interesting will be whether Baker holds onto DFS”s sacred cows - for example, its stratospheric spending on advertising and the corny ads which Kirkham himself has always taken a personal interest in. He might think its time for a fresh start, although with Kirkham remaining a shareholder, and the existing model having worked so well, I’m sure he won’t rush to change what has been a winning formula.
Whatever happens though, Baker has plenty of options, and the demise of many competitors through the downturn has put the company in an even stronger position to grow its dominance of its market..
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