Beds retailer Dreams has been put up for sale, it is understood.

According to the Sunday Times, Dreams’ lenders stepped in after the retailer failed to persuade Exponent, the private equity firm, to plough tens of millions of pounds into the business it bought four years ago.

Dreams has 270 stores and was founded by Mike Clare and his wife Carol, who sold it to Exponent for £220m.

It is understood Dreams has struggled under its new owner, and its banks became concerned about the debt levels after the chain expanded rapidly.

Exponent put in new capital in 2011 but the lenders asked for a second cash injection this year.

Ernst & Young has been hired to handle the sale process.

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