Dreams sales jump 2.2% amid record store investment

Dreams has revealed turnover increased by 2.2% to £395.4m for the 52 weeks ending December 2023, following a period of record investment in store expansion and refits and upgrading its technology system. The specialist bed retailer said the performance was underpinned by 4.4% orders like-for-like (LFL) growth and continuous market share gain, which was partially offset by the “significant” delivered sales bounce back experienced after the Covid-19 pandemic in FY22. Underlying EBITDA before currency movement rose to £59m (FY22: £58m) while gross margin as a percentage of sales increased by 1.1% to 53.7%. This growth was despite a tough market backdrop impacted by inflationary headwinds and a decline in consumer spending. Dreams said FY23 marked a record year of capital investment as the company continued to modernise its store experience, supply chain and technology. Improvements achieved across the business include opening its largest distribution centre to support faster deliveries within the Midlands area, opening four new stores and ongoing store refits. The business also undertook a series of upgrades to its technology systems and invested in new machinery in the Dreams Bed Factory (DBF), while also rolling out more energy efficient vehicles for our delivery drivers. Despite being a record year for brand and capital investments, Dreams’ free cashflows grew compared with FY22. Dreams has continued to expand its store portfolio in 2024, having opened two new stores and refitted 22 since January 2024, and targeting further openings by early 2025 through accelerated opening programme whilst continuing to refit its core portfolio. In June this year, Dreams marked another milestone in its growth strategy by opening a new distribution warehouse in Gartcosh, to increase its stock capacity by 30% with a view to improving product availability and reducing lead times for customers in Scotland. During FY23, the manufacturing unit in Oldbury continued to excel, achieving a 9% increase in mattress production volumes while maintaining industry leading quality metrics. The business also refreshed over 90% of its own product ranges, the biggest launch of newness in the last five years. Jonathan Hirst, CEO of Dreams, said: "Our strong performance is a testament to the strength and resilience of the Dreams business and brand. By staying focused on delivering expertly crafted beds and mattresses and best-in-class customer service, we've maintained growth against challenging market conditions. The last financial year was a record year of investment for us and we made significant upgrades across our business which will set us up for success. “Moving forward, we will continue to expand our store estate and invest in instore experience, manufacturing operations and in our exceptional colleagues, who remain at the heart of our success. I’m confident that Dreams will continue be the UK’s most loved bed retailer, be first choice for customers across the UK and continue to go from strength to strength."