Dreams, which went into administration resulting in 400 job losses, has found a savior in Sun European Partners, is said to acquire the beds retailer through a pre-pack administration, effectively saving 1,675 jobs while securing 171 Dreams stores. With the rescue deal, Dreams will shed debts that amounted to £279m. Dreams founder Mike Clare, who could not win the bid to save his retail chain, said that he would set up a new furniture chain. Dreams administration is the latest blow to high street which has recently witnessed closure of Comet, Jessops, HMV and Blockbuster, along with the most recent casualty being Axminster, the iconic carpet firm.
Although Sun European Partners will acquire 171 Dreams stores, around 93 stores will remain in administration. Sun European is willing to takeover Dreams’ debt for £35m, and will invest about £15m in the business to provide it with sufficient capital to continue. Dreams will continue to function as a standalone business, although Sun European will explore ways of working with its other furniture and homeware brands, ScS, the sofa and carpet retailer, and Sharps, which sells bedroom furniture. Rather than adding more outlets, Sun European plans to improve sales at the existing Dreams stores.
Dreams founder Mike Clare said that he would create a new beds retailer with the intention of “filling the vacuum the demise of Dreams will leave in the high street”. He said he planned to set up Buzz Beds, and was interested in about 50 of the best Dreams stores in administration. Elaborating on his next business venture, Mike Clare said that Buzz Beds would be funded without a private equity partner, and that he aims it to be different from other brands in the furniture market, with an innovative pricing structure and fast delivery.
Private equity firm Exponent acquired Dreams from its founder Mike Clare in 2008 in a deal worth more than £200m. Mike Clare reportedly wanted to win the business back and keep all the stores open, but was turned down by lenders Royal Bank of Scotland and Barclays. Dreams has been put up for sale by Exponent and now Mike Clare wishes to purchase at least some stores of the bed retailer.