National bed retailer Dreams has announced full-year results for the 52 weeks ending December 2023, showcasing its continued impressive performance over the year, driven by investments in production and distribution, and improved customer satisfaction rates.
Dreams’ reported turnover increased by 2.2% to £395.4m (FY22: £387.0m), 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.
The past financial year (FY23) marked a record year of capital investment for Dreams, 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 to enable Dreams to deliver the best possible in store experience for its customers.
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 to 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 their 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.
The business also continued to innovate during this period and launched a digital version of Dreams’ famous Sleepmatch experience, making it available to customers via Dreams’ website for a seamless omnichannel offering. Sleepmatch is an innovative 3D fit technology bespoke to Dreams stores that measures customers’ sleep and support needs, enabling them to find the right mattress for them.
Dreams also unveiled a multichannel brand campaign featuring actress Gillian Anderson. The “Think what a Dreams bed could do for you” campaign, launched in October of 2023, has driven up footfall to stores, lifted top of mind and delivered strong quality and trust metrics. This campaign has continued to drive brand awareness over the past nine months, most notably with new TV adverts featuring Gillian Anderson alongside British Olympic and Paralympic athletes, invigorating Dreams’ role as Official Sleep Partner of Team GB and ParalympicsGB.
In the build up to Paris 2024, March 2023 saw Dreams tap into a number of incoming and growing trends with the launch of a Dream Team Gold mattress range, manufactured by DBF, broadening its manufacturing capabilities and adopting new technologies to meet changing consumer demand. The Gold Range incorporates wool fillings from selected Black Country farmers, sustainable antibacterial fibres and a new Thermoswitch fabric, for an instant cooling effect.
On the back of consumer demand for cooling products to improve sleep quality, in March this year Dreams launched the new TEMPUR Pro Air SmartCool range, featuring TEMPUR’s most adaptive and coolest mattress yet. Sales of the new range have exceeded expectations.
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.”
