DFS has completed the acquisition of family-run business and rival retailer Sofology in a £25m deal.
DFS will take control of Sofology’s 37 UK stores and the group said it has already identified £4m in annual cost savings as part of the tie-up.
Sofology reported total revenues of £143m last year however it booked a statutory loss before tax of £8.9m.
Ian Filby, DFS chief executive, said: "While the UK furniture retail market continues to be very challenging, we remain focused on making strategic progress to strengthen our position in living room furniture.
"This acquisition represents a clear opportunity for DFS to accelerate our proven strategy of broadening our appeal, generating substantial long-term returns for shareholders underpinned by well-understood synergies.
"Sofology's distinctive market position is a good fit with our existing brands. Jason and his team should be congratulated for creating a fantastic and fast-growing business and I'm looking forward to working with Jason and the team as they continue to grow Sofology as part of the group."
DFS has bought other rivals over the past few years including Dwell and Sofa Workshop.
Sofology CEO Jason Tyldesley and his management team will continue to lead the business post completion.