Dreams defies furniture sector gloom with 18% jump in profits

Bed specialist Dreams has triumphed over grim furniture retail conditions by revealing an 18 per cent hike in operating profits to £14.4m in the year to December 25.

Dreams said it was able to lift profits as a result of driving “significant economies of scale, despite the rising fuel and steel prices that impacted the sector”.

Like-for-likes increased 1.5 per cent, while total sales rocketed 16 per cent to £194m.

It is the first set of results from the 200-store retailer since it was bought out by private equity firm Exponent in March last year. The figures take into account extraordinary costs and changes to accountancy procedures.

The beds retailer plans to open 30 stores this year, after launching the same number last year. Nine will have opened in the first quarter.

Sources said that at the start of last year Dreams’ share of the market stood at 12 per cent. It is thought this has grown to between 19 to 20 per cent in the period, as independents – which have traditionally accounted for about 40 to 50 per cent of the market – have collapsed.

Dreams chief executive Nick Worthington said: “We are delighted by our performance in 2008 during a difficult time for the bed market and retail in general. Our success has come from the hard work and commitment of everyone at Dreams and staying focused on what we do best – giving our customers a great night’s sleep.”

Dreams chairman John Clare said: “Dreams has delivered an encouraging set of results and made a significant improvement in market share. The combination of choice and commitment to customer service is proving to be a powerful one in the bed market.”

Founder Mike Clare – who set up the retailer in 1987 – retained a non-controlling but “substantial” stake in the business when Exponent bought it last year. He also took up a new non-executive role as president, and former DSGi chief executive John Clare joined as non-executive chairman as part of the deal.