From bust to boom: Beds retailer Dreams, which slumped into administration in 2013, on a roll now as sales rise for fifth year in a row
- Dreams is ‘one of retail’s biggest success stories of the past 5 years,’ experts say
- Last year, its like-for-like sales grew 1.9 per cent, despite a challenging market
- Profits rose 12 per cent as it launched a new web platform and refreshed shops
Beds retailer Dreams, which slumped into administration six years ago, is sleeping easy now after chalking up its fifth consecutive year of sales and profit growth.
The specialist said comparable sales rose by 1.9 per cent in 2018, and profits jumped by nearly 12 per cent, marking the next stage in an unprecedented retail turnaround.
The growth, albeit a slowdown on 2017, comes despite particularly challenging trading conditions in the UK furniture and big-ticket markets.
No longer a nightmare: Beds firm Dreams is hailing five years of sales and profits growth
Furniture sellers have come under significant pressure since the EU referendum as uncertain shoppers hold back on moving house or from making substantial purchases.
Dreams’ main rival Bensons for Beds lost market share throughout 2018, while Feather & Black and Warren Evans both buckled under the pressure and slumped into administration.
‘The retailer should be commended for successfully navigating difficult market conditions,’ said Matt Walton, senior retail analyst at GlobalData.
During the financial year, Dreams started selling its own mattress-in-a-box brand – Hyde & Sleep – across its 198 UK stores, as it goes head-to-head with fledgling market entrants like Eve and Casper. It refurbished 13 of its shops too.
Dreams also launched a new e-commerce platform, which has a ‘mattress finder’ and a ‘mobile-friendly finance’ tool, as it eyes a bigger share of the online furniture market.
The company said its digital sales in December rocketed nearly 50 per cent as a result.
Refreshing: Dreams has refreshed its product lines to keep pace with the evolving market
In the aftermath of the financial crisis, Dreams was one in a long line of retail firms to cave under severe economical strain. It was snapped up out of administration by private equity firm Sun Capital, which, six years later, still owns the retailer today.
Between 2014 and 2018, Dreams’ sales rose by over 50 per cent. Today, Walton dubbed the transformation, ‘one of retail’s biggest success stories over the past five years’.
Boss Mike Logue, who was parachuted in by Sun to mastermind the firm’s turnaround, said: ‘2018 was a challenging year for the UK retail market.
Dreams chief executive Mike Logue at the company ‘Bedquarters’
‘However, our results for the period demonstrate our unwavering commitment to make, sell and deliver the most comfortable beds across the UK.’
‘We have remained focused on providing an excellent range of products at the right price point which, coupled with our healthy balance sheet, means that we have had the flexibility to adapt to market conditions,’ Logue added.
The beds boss cautioned that the sector’s ‘well publicised’ difficulties are far from over but said Dreams is in a ‘solid position’.
Global Data’s Walton added that competition among the market leaders is forecast to intensify in 2019, ‘as Ikea capitalises on its strong value credentials and physical expansion to forge ahead and Bensons readdresses its strategy’.
But, he said: ‘Dreams’ prudent investments and robust multichannel offer will ensure it continues to gain share and protect itself as the number two retailer for bedroom furniture in 2019.’