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Bed store Dreams has been part rescued by a consortium funded by private equity firm Sun Capital Partners, for an undisclosed sum, saving 1,600 jobs and keeping two thirds of stores open.
Alan Hudson, Craig Lewis and Joe O'Connor of Ernst & Young LLP, were appointed joint administrators of Dreams plc on 5 March.
Dreams is the UK’s leading specialist retailer of beds and associated products with 266 stores across the UK, employing approximately 2,000 employees.
Almost immediately the company’s business and assets were sold to a new company controlled by Sun Capital Partners, for an undisclosed sum. As a result the business has secured new investment and will continue to operate as a going concern outside of insolvency. The new owner will honour customer orders where part payment deposits have been made for goods and customer warranties.
Dreams, like many on the high street, was forced into administration due to rapid expansion, expensive property leases and the consumer spending squeeze.
Alan Hudson, joint administrator, said: ‘High street 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.
‘While 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.’
Hudson confirmed that ‘a sale has been completed that sees the majority of the Dreams business including 171 of its stores, its head office and its two UK manufacturing facilities being sold to a new company controlled by Sun Capital Partners. The business will continue to trade without interruption, over 1,600 jobs have been transferred and the future of Dreams on the UK high street has been safeguarded.
E&Y will continue to look for potential buyers for the remaining stores and they will continue to trade.
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