Update on Primback Case

D.F.S. Furniture Company PLC
26 March 2002




                                             26 March 2002



                           DFS FURNITURE COMPANY plc

                            UPDATE ON PRIMBACK CASE



In a High Court action, HM Customs & Excise have been ordered to repay to DFS
Furniture Company plc £6.2 million, plus interest and costs, relating to VAT
payments made to Customs & Excise in June 1997 associated with the Primback
case.  HM Customs & Excise have been refused leave to appeal against this
judgment by the High Court, but have a further 28 days in which to seek leave to
appeal from the Court of Appeal.



DFS Furniture Company is separately appealing before a VAT Tribunal a number of
assessments raised by Customs & Excise which are also associated with the
Primback case.  At 28 July 2001, the Company had provisions of £67.4 million
relating to this case.  Customs & Excise have been seeking to recover monies
which they consider due to them.  However, it is the view of the Company's legal
advisers and auditors that, irrespective of the outcome of the appeals to the
VAT Tribunal, of the amounts represented by the above provisions £17.4 million
represents amounts which are no longer recoverable by Customs & Excise or
amounts which Customs & Excise cannot claim and this sum will therefore be
released to the Group's profit and loss account as an exceptional item in the
first half of the current financial year.  The results for this period will be
announced on 18 April 2002.



Enquiries:



DFS Furniture Company plc                               Hudson Sandler
Graham Kirkham, Executive Chairman                      Keith Hann
Jon Massey, Chief Operating Officer                     Noemie de Andia
Ian Bowness, Finance Director                           Tel: [phone]
Tel:  [phone]



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