Dunelm to buy Worldstores owner WS Group for £8.5m

Homewares retailer Dunelm has agreed to buy the assets of the WS Group – which owns Worldstores, Achica and Kiddicare – for £8.5m.

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The WS Group currently generates annualised revenue of around £100m and has approximately 650 employees.

Worldstores is one of the UK's largest online retailers of products for the home and garden, while Achica is a members-only online store offering furniture, homewares and accessories, often at significant discounts to regular retail prices. Kiddicare is a multichannel retailer, selling nursery supplies and merchandise for children and young families.

Dunelm said all three propositions complement its existing offer. Furthermore, Worldstores provides an extensive furniture range and a unique technology platform which will provide the company with additional benefits.

Dunelm will also be able to improve performance by sharing product ranges, harmonising terms and extending the multichannel delivery proposition, the benefits of which it expects to be around £10m a year over the short to medium term.

The board expects that in Dunelm's financial year ending 1 July 2017, from the date of acquisition, the WS Group will incur trading losses of around £5-10m. In Dunelm's financial year ending 30 June 2018, the first full year of ownership of the WS Group, it is expected that the WS Group will be at least break-even.

Chief executive officer 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."

The deal is subject to each of the companies in the WS Group being placed into administration and Dunelm expects to acquire the WS Group businesses later on Monday from the intended administrators, William Wright and Robert Croxen of KPMG LLP.