Equity firm completes deal for bed retailer Dreams

1:34pm Wednesday 6th March 2013 in News By Simon Farr

Dreams buyout deal completed Dreams buyout deal completed

BED specialist Dreams has been bought by a private equity firm, securing its Loudwater headquarters and 171 stores.

Sun Capital Partners completed a ‘pre-pack administration’ deal for the bed retailer for an undisclosed figure today.

The deal sees Sun Capital take over the firm’s HQ in Knave’s Beech, two manufacturing facilities and 171 of the chain’s 266 stores, securing about 1,600 jobs.

The remaining stores will remain open for business while administrators Ernst & Young LLP seeks to find a buyer.

That buyer could be Dreams founder Mike Clare, who told the Free Press he was disappointed he could not buy back the firm he sold in 2008.

But he revealed he was drawing up plans for a “new radical bed retailing venture” and could buy the remaining stores.

In a statement, his office said: “Mike Clare is disappointed to have not bought Dreams back but he’s not giving up.

“He already has advanced plans to save jobs and rescue any stores that will be closed by Sun, and possibly others, in a new radical bed retailing venture."

Ernst & Young said in the economic climate, with operating margins being squeezed and heavy lease liabilities, administration was inevitable.

In a statement, joint administrator Alan Hudson said: “Retailers have faced unprecedented conditions over recent years, and the market for higher value discretionary purchases has been particularly tough.

“Dreams is a well known market leader, but in common with many others has suffered as a result of this depressed retail environment, a rapid expansion of its store portfolio and onerous lease liabilities.

“Whilst recent performance has improved, it has seen a decline in like for like sales across its store portfolio as well as its operating margins being squeezed.

“This has resulted in the business being unable to continue to operate outside of administration.”

Comments (5)

5:38pm Wed 6 Mar 13

Cyclo says...

The future of Dreams is by no means secure. The underlying business climate has not improved - hopefully the private equity group can make something out of this business....
The future of Dreams is by no means secure. The underlying business climate has not improved - hopefully the private equity group can make something out of this business.... Cyclo

6:02pm Wed 6 Mar 13

bb1 says...

Private equity groups more often indulge in asset-stripping - watch out for a wave of redundancies.
Private equity groups more often indulge in asset-stripping - watch out for a wave of redundancies. bb1

6:42pm Wed 6 Mar 13

Voyeur says...

I thought this company had already been asset stripped by the most recent owners who paid Mike Clare £200 million for the business. It just looks like George Osborne's Plan A working to plan.
I thought this company had already been asset stripped by the most recent owners who paid Mike Clare £200 million for the business. It just looks like George Osborne's Plan A working to plan. Voyeur

1:14am Thu 7 Mar 13

ImpeturbableLawrence says...

The site adjoins another former factory site roughly surrounded by Snakeley Close, Berkeley Road and Conway Close - if the two sites are owned by the same company there could be a large housing development there.
The site adjoins another former factory site roughly surrounded by Snakeley Close, Berkeley Road and Conway Close - if the two sites are owned by the same company there could be a large housing development there. ImpeturbableLawrence

3:10pm Thu 7 Mar 13

Flashheart says...

That's probably put any future sponsorship for Wycombe Wanderers to bed...
That's probably put any future sponsorship for Wycombe Wanderers to bed... Flashheart

Comments are closed on this article.

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