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Dawson International

  • BY: Andrew Hore |
  • POSTED: 29/07/2008 |

Dawson International has sold its Dorma brand to Dunelm for £5m.

Dorma supplies bed linen and related products. Dawson will be able to continue to use the Dorma brand until January 2011. It will also supply furnishings retailer Dunelm with Dorma and own-brand bed linen for an initial period of four years.

It will cost Dawson around £3.3m to exit this business although that will be spread over the period to January 2011.

Dawson acquired Dorma from Coats Holdings Investments for £9.48m, plus the repayment of a £966,000 loan, in February 2005. In 2003, it lost £3.6m on turnover of £70m and had net assets of £14.2m.

Dawson split the business into private label and Dorma-branded operations. It is the latter that is being sold. It has struggled to move the Dorma brand back into profit. The private label business is profitable. 

In 2007, Dorma made an operating loss after central overheads of £3.6m. 

Management expects Dawson’s 2008 interim loss to fall from £4.6m – excluding £2.5m property disposal gain - to £1.5m. Favourable exchange rates have helped the spinning division return to profit. Knitwear reduced its loss in the traditionally weaker first half. All of Dawson’s divisions may move into profit for the year as a whole.

Dawson shares rose 0.25p to 2.375p, valuing the company at £5.35m.  Net debt was £5.7m at the end of 2007.

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