Dreams has piqued the interest of rival Chinese mattress-makers and UK giant Silent Night in the first round of bids for the business.

The mattress retailer, which was put up for sale in January and has drafted in Rothschild to handle the auction, is understood to have received bids from Chinese mattress manufacturers MLily and King Koil China.

Dreams boss Mike Logue unveils the retailer's new image

MLily is the biggest memory foam mattress manufacturer in China and recently signed a five-year sponsorship deal with Manchester United Football Club, while private equity firm Advent bought a majority stake in King Koil in November last year.

The Chinese pair are joined by UK mattress-maker Silent Night, which is already a supplier to the retailer.

It is understood that South African giant Steinhoff also mulled a takeover of the retailer as part of its clutch of bids for retailers.

However, the business, which already owns Bensons for Beds and Harveys, has since abandoned the bid due to competition concerns.

Dreams was bought out of administration by Sun European in 2013 and have since delivered a dramatic business turnaround, posting a 136% leap in pre-tax profits to £32m in 2016.

Dreams boss Mike Logue unveils the retailer's new image

Chief executive Mike Logue, who was parachuted in to revive Dreams’ fortunes, said overhauling company culture was key to the turnaround’s success. 

But, more than three years later, he told Retail Week his work is not over yet. 

Logue has pledged to deliver a world-class digital framework, a continually updated store image and increased output from the retailer’s factory in Oldbury, to negate the impact of currency headwinds.

Last month, he also shook up the retailer’s image with a new marketing campaign to emphasise Dream’s end-to-end vertical integration, the extent of its UK manufacturing and ownership of its delivery network.