Dunelm has agreed to buy Worldstores, Achica and Kiddicare for £8.5 million. The acquisition is subject to each of the companies in the WS Group being placed into administration. Dunelm expects to acquire the WS Group businesses later today from the intended administrators, KPMG. The WS Group management, including the founders, will continue to run WS Group following the acquisition.
WS Group currently generates annual revenue of around £100 million and has 650 employees.
Chief executive of Dunelm, John Browett said: "We are excited by this opportunity to accelerate the growth of our internet operation, more than doubling its size, and enhancing our position as the destination Homewares retailer in the UK, both online and offline.
“Between the store network, broad product range and strong brand that Dunelm has built and Worldstores' extensive homewares and furniture offer and unique platform for next day delivery and flash sales, we will strengthen our leading position as the UK's home of homes."
Dunelm said all three brands complement their existing offer and that it will be able to improve performance by sharing product ranges and extending the multichannel delivery proposition, the benefits of which Dunelm expects to be in the region of £10 million per annum over the short to medium term.
The company also plans to inject up to £15 million into WS Group to fund historic working capital and to manage disruption for suppliers and customers. Dunelm will also pay circa £3 million of ancillary and transaction related costs which are expected to be identified separately in the group's accounts.
The board of Dunelm currently expects that in financial year ending 1 July 2017, WS Group will incur trading losses of around £5 million to £10 million but expects it to break even in the year ending 30th June 2018.
Worldstores' founders, Richard Tucker and Joe Murray said: "We're delighted to be working with Dunelm, in whom we have found a partner who shares our vision for our company and brands, and is backing our ambitious plans for growth."
