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Equity firm completes deal for bed retailer Dreams
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.”
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