Mike Clare - Dreams

Everyone needs a bed. You’re born in one, spend a third of your life in one and, more often than not, die in one. There are 5,000 companies who sell beds in the UK. In every town there’s a bed centre. Half of the £1.2bn market is owned by 20 companies.

Mike Clare is founder and chief executive of the UK’s largest bed retailer and has a patter he’s delivered a thousand times. The man eats, sleeps and no doubt dreams the things. Dreams recorded an annual sales boost of 22% for 2006, hitting £154.5m, and a 38% increase in net profit. Late last year, it was named the fastest growing UK retailer and polled 69th fastest growing company in Europe’s 500. The prestigious list hailed the organic growth of its turnover and new job creation since 2002.

CREATING A WINNING FORMULA

The business now employs more than 1,200 and has over 150 superstores, plus a major UK manufacturing plant. At the heart of the company’s growth is a well-honed roll-out format. More stores means greater reach, more footfall and increased sales. Clare says: “We’ve got a successful formula now – go to a town, find a store to let, negotiate hard, get salespeople, blue carpet, invite the mayor and have a grand opening with a welcome mat and a cake shaped like a bed.” Simple. He is in the enviable position of having a team dedicated to store openings. But with 25 stores slated for 2007 alone, at a cost of several million, that is a necessity.

In a fragmented market where focused bed retailers such as Dreams and Bensons compete with the likes of IKEA, Furniture Village and Argos, high-stret department stores and thousands of small independents, it’s hard not to step on toes. But Clare can’t let nostalgia rule. “At the end of the day, if we don’t open in a town against local independents, someone else will,” he says. The north-west, Scotland and “fill-ins” are the expansion targets this year – 10 new stores in and around Liverpool and Manchester will be served by the company’s new depot in Warrington and an opportunistic acquisition north of Hadrian’s Wall has opened up the Scottish market.

Eight-store outfit Off to Bed was purchased in November last year for a knock-down “six-figure” sum and when Growing Business first spoke to Clare in December he was understandably upbeat, while recognising the challenge of turning around a business on the verge of insolvency. It was Dreams’ first acquisition, incorporating a huge home delivery depot near Glasgow that was capable of serving those stores and planned new ones.

Clare knew the stores would need to be completely refurbished, restocked and rebranded, and that staff would need to be retrained. Additionally, the company planned to open a further 17 outlets in Scotland by the end of 2008.