Dreams are made of this: a £500m float for the bedshop chain

Britain's largest beds retailer, Dreams, is looking at a stock market listing that could value the group at up to £500m.

Mike Clare, founder and chief executive of Dreams, has decided to float the 170-store chain after talks last year with private equity groups about selling a minority stake. Instead, he wants to fund expansion by listing in time for the group's 25th anniversary in a few years.

Mr Clare is sole shareholder in the firm he started from a west London store in 1985. He has since built it into the largest in the UK and last year more than doubled profits to £16m.

Clare's expansion plans include increasing store numbers to 300 and making acquisitions in the homeware retailing market. But he is likely to retain a controlling interest in the business, which he calls his "fifth child".

Mr Clare said: "Dreams is a sector-leading category killer with huge headroom to more than double in size in the UK. The past three years have seen turnover increase by 86 per cent with profits rising by over 350 per cent." Dreams is planning 50 new branches this year. Britons buy about 2.5 million beds a year, worth £1bn.