Shares in sofa retailer DFS (LON:DFS) jumped at market open on Thursday, after it announced the takeover of smaller rival Sofology.

The deal is initially expected to be worth £25 million, with DFS saying the acquisition would add another “strong distinctive brand” to its business.

The news comes after DFS issued a profit warning last month, causing shares to plunge by 22 percent last month. The company hopes that adding specialist retailer Sofology to the group will allow DFS to compete better in the market, adding another network of 37 stores in the UK and a strong web presence to the group’s portfolio.

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.”

Shares in DFS are currently up 1.71 percent at 223.50 (1129GMT).