- Full-year sales up 20% to £280m (FY15: £234m)
- Like-for-likes up 14.1% (FY15: 19.4%)
- Profit before tax up 136% to £32m (FY15: £13.5m)
- EBITDA Margin of 14.4% (FY15: 9.3%)
- Initial £53m capital investment from owner Sun European Partners now repaid in full
Dreams’ profits and sales soared in 2016 – the third and final year of its turnaround plan – Retail Week can reveal.
The bed specialist, which fell into administration in 2013, said pre-tax profit rocketed 136% to £32m in the 12 months to December 24, 2016.
Sales grew 21% to £280m, while like-for-likes advanced 14.1%.
Dreams also expanded its profit margin to 14.4%, compared with 9.3% in 2015.
The growth stems from a three-year plan implemented by chief executive Mike Logue, who was drafted in to transform the ailing business in 2013 when it was losing £5m a year.
The retailer’s private-equity owner Sun European Partners is understood to now be considering a sale of the business, valued at around £400m.
Logue said 2016 was a “pivotal year for Dreams, building on the last three years of growth”.
“Our significant investment, matched by the incredible efforts of our 1,850 colleagues across the UK in our factory, our 181 shops and our delivery centres have enabled us to achieve these record results,” he said.
Innovation
Logue attributes last year’s growth in part to driving efficiencies at the company’s factory in Oldbury.
The business ploughed over £1m into new machinery and enhanced testing facilities at the factory, and has consequently been able to increase the amount of product it manufactures on home soil.
Dreams completed the replacement of its 130 delivery vans, continued to refresh its product lines and launched ‘bed-in-a-box’ brand Hyde & Sleep.
The retailer’s ecommerce sales grew 34% year-on-year following improvements in its digital offer.
It also continued to invest in staff training and implemented Pillow Talk – a survey to monitor customer feedback. Current customer satisfaction levels stand at 94%.
During the period, Dreams opened 14 new stores, including three relocations, taking its total to 181. It also refurbished 10 stores.
Current trading
Dreams said it has made a strong start 2017 and claimed to be “well-positioned to take advantage of further growth opportunities”.
Logue’s strategy for the next three years includes rolling out 20 new-concept stores in 2017 and refurbishing 30.
Dreams will also begin advancing its omnichannel capabilities with the launch of a new digital store format.
Logue said: “While potential future challenges to the UK consumer economy are well documented, we are confident that we will continue to successfully execute our strategy and that it will be another year of significant progress for Dreams.”
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