Dunelm swoops for online giant in £8.5m deal

Syston-based homewares giant Dunelm will later today (28 November) buy a struggling online rival out of administration in  a deal worth £8.5m.

Dunelm has bought WS Group, which trades as WorldStores and which is backed by Goldman Sachs.

The WS Group consists of Worldstores, Worldstores Kiddicare and Achica.

WorldStores, which also owns the flash-sale specialist Casafina, hired KPMG some weeks ago to try and push through a quick sale of the business. Over the weekend, insiders said that unless a buyer was found then WorldStores may not be able to continue to trade without outside investment.

The WS Group currently generates yearly revenue of around £100m and has 650 employees.

Goldman Sachs invested £25m in the company last year, but WorldStores is expected to make a loss of £12.5m this financial year.

WorldStores, which is based in Twickenham, claims to be the UK’s biggest online retailer of home and garden products.

It was set up on 2008 by Joe Murray and Richard Tucker.

John Browett, CEO of Dunelm, said: “We are excited by this opportunity to accelerate the growth of our internet operation, more than doubling its size, and enhancing our position as the destination Homewares retailer in the UK, both online and offline. Between the store network, broad product range and strong brand that Dunelm has built and Worldstores’ extensive homewares and furniture offer and unique platform for next day delivery and flash sales, we will strengthen our leading position as the UK’s Home of Homes.”

Tucker and Murray said: “We’re delighted to be working with Dunelm, in whom we have found a partner who shares our vision for our company and brands, and is backing our ambitious plans for growth.”

The WS Group management, including the founders, will continue to run the WS Group which will be placed into administration today before being bought by Dunelm.

Dunelm says it expects the WS Group to break even within the first year of taking it over.