Thu, 07 Mar 2013 | ADMINISTRATION
Bed retailer Dreams has been put into a pre-pack administration through a deal with a new company controlled by Sun Capital Partners.
The collapse of the company resulted in the closure of 90 stores with 400 jobs lost. However, the remaining 171 shops and nearly 1,700 jobs have been saved.
Alan Hudson, a joint administrator for Ernst & Young, noted that Dreams had been hit by a general downturn on the British high street, where retailers have faced “unprecedented conditions over recent years”. Big ticket items, such as beds and sofas, have been particularly hard hit as people have learnt to make do with what they have while their income remains depressed.
Mr Hudson added: "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.”
The news comes shortly after Dreams' founder Mike Clare put in a bid to buy back the business, but it is thought that he was rejected by the company's banks, RBS and Barclays.
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