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Chinese rivals eye bids for top UK bed retailer Dreams

By ANGUS MCNEICE in London | China Daily | Updated: 2017-05-17 08:04

China's biggest memory-foam manufacturer Mlily and rival mattress maker King Koil China are set to go head-to-head in the auction for one of the United Kingdom's biggest bed retailers, Dreams, with bids expected in the range of 400 million pounds ($517 million), according to media reports.

Dreams' owner-London-based Sun European Partners, the European advisor to US-based private equity firm Sun Capital Partners-put the mattress company up for sale earlier this year and appointed investment bank Rothschild to run the auction.

The two Chinese groups are expected to compete against UK bed maker Silentnight, owned by HIG Capital, according to the Daily Telegraph. Silentnight already supplies mattresses to Dreams.

Both Sun European Partners and Dreams declined to comment on the sale when contacted by China Daily.

Dreams was founded in 1986 under the name Sofa Bed Center in Uxbridge, West London, by Mike and Carol Clare, who used loans and savings of just 16,000 pounds. Mike Clare joined the ranks of the UK's wealthiest people when he sold the company for 200 million pounds to UK-based private equity firm Exponent in 2008, months before that year's global banking crisis.

Exponent battled to keep up with interest payments and Sun European Partners bought Dreams out of administration in 2013.

The new owner closed dozens of stores across the UK and oversaw a successful campaign that encouraged consumers to more regularly replace mattresses. In 2016, Dreams posted pretax profits of 32 million pounds, up 136 percent.

Shanghai-based King Koil China has 250 retail stores in 124 cities throughout China and is a leading player in supplying beds to Chinese luxury hotels, with a 35 percent market share.

Last November, London-based private equity firm Advent International announced it had acquired a majority ownership interest in King Koil.

Mlily is the mattress and pillow brand of Shanghai-based Healthcare Ltd.

Founded in 2003, Mlily has been the largest memory foam manufacturer in China since 2011, with export volumes worth $150 million in 2014, according to the company's website.

The company signed a five-year partnership with English Premier League club Manchester United in October 2016. Mlily mattresses have been installed at the club's Aon Training Complex.

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