Dreams survives but not all local shops included in rescue deal
BED retailer Dreams is the latest High Street store to enter administration.
However, the bulk of the firm’s shops and staff have been saved following an immediate sale by the administrators.
The High Wycombe-based firm, which has shops on high streets and retail parks all over the West Midlands and a manufacturing facility in Oldbury, saw joint administrators appointed on Tuesday in the shape of Alan Hudson, Craig Lewis and Joe O’Connor of Ernst & Young.
The administrators subsequently sold the company’s business and assets to a new company controlled by Sun Capital Partners, for an undisclosed sum. As a result the business has secured new investment and will continue to operate as a going concern outside of insolvency. The new owner will honour customer orders where part payment deposits have been made for goods and customer warranties.
However, Dreams has 266 stores across the UK, employing approximately 2,000 employees and the deal is for 171 of its stores, its head office and its two UK manufacturing facilities and around 1,600 jobs.
Locally the manufacturing facility at Oldbury – employing 200 people – and stores at Sheldon, Kings Heath, Perry Barr and Erdington in Birmingham and others at Brierley Hill, Oldbury, Leamington Spa, Redditch, Tamworth, Wolverhampton and Wednesbury are part of the rescue package.
The remaining stores – which locally include Harborne in Birmingham, Kidderminster, Cannock and Walsall – will remain open for business whilst the administrators seek to find a buyer for them.
Hudson said: “High Street retailers have faced unprecedented conditions over recent years, and the market for higher value discretionary purchases has been particularly tough.
“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.
“Whilst 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.”
Hudson added: “The business will continue to trade without interruption, over 1,600 jobs have been transferred and the future of Dreams on the UK High Street has been safeguarded.”
Meanwhile, Leicester-based travel business Thomas Cook has begun a “consultation process” to restructure its UK business.
Subject to that consultation, this process would see the group’s UK workforce reduced by 2,500 full-time roles, mostly in back-office functions and its retail network, including some store closures.
The group currently employs 15,500 across the UK & Ireland.
