Dreams continues relentless sales growth; Bedstead imports help gross profit margin

29th July 2009 | beds | Retail giant Dreams is likely to take sales beyond £200m for the first time this year. The chain, sold to Exponent Private Equity by founder Mike Clare in March 2008, increased turnover 16.5% to £194.4m during the year to 31st December.

Underlying operating profit climbed 19% to £13.5m, although a raft of exceptional items pushed the firm into a pre-tax loss of £3m. These items totalled £16.25m, and include, amongst other things, a £9m fair value charge in respect of share options granted, a £2.7m fall in asset values, and £2.5m on stock revaluation.

In terms of product mix, the company imported a greater number of bedsteads, which it said helped gross margins, and also introduced a second shift at its own Oldbury bed factory.

A net 33 stores opened during the year, with the firm shelling out £400,000 on Peerless Furniture, which ran three Dreams stores as franchises. Dreams increased the size of its Wednesbury distribution centre, and promised further home delivery depot developments this year to support store growth.