Carpetright joins queue to target move for Dreams

Floor coverings firm Carpetright has become the latest suitor to express an interest in Dreams, the troubled beds retailer that is up for sale.

Carpetright, whose founder and chairman is Lord Harris, has asked to see the sales memorandum on debt-laden Dreams from Ernst & Young, the accountancy firm handling the auction.

Royal Bank of Scotland, the retailer’s main lender, put the 270-store chain up for sale before Christmas and Ernst & Young has received more than 20 expressions of interest ahead of first-round bids in early February.

Carpetright, which also sells beds, is looking at Dreams’ best stores. Sources have suggested a full-blown takeover bid is unlikely.

Mike Clare, the retailer’s founder, sold Dreams to the private-equity firm Exponent for £222 million in 2008. Since then it has struggled with its debt burden of £40 million and the downturn in big-ticket spending, although the retailer grew sales by 7 per cent over Christmas.

Clare is now plotting to buy back Dreams. Other suitors include Sun European Partners, Steinhoff International, the owner of Harveys and Bensons for Beds, and beds firm Silentnight.