Bed specialist Dreams is set to notch up double-digit revenue growth this year on the back of its record year in 2009, but the retailer predicts more of its rivals will hit trouble.

Chief executive Nick Worthington said: “The market is challenging but we’ve adapted accordingly. We expect to see double-digit growth again this year.”

He added that the retailer had made a “good start to the year but the snow made its mark”.

He added that after a good February and March, and a “very good Easter”, trading dropped off in the lead up to the election. However, Worthington added trade had steadily picked up since the Budget.

He said the VAT rise in January will “have a positive impact in the fourth quarter” but a “detrimental effect on 2011 and beyond”.

Worthington revealed Dreams is to roll out its bedroom furniture range to all its larger format stores after a successful trial last year.

Worthington said Dreams is “filling the gap that MFI left” by selling wardrobes, bedside tables, chests of drawers and sofa beds. The retailer is also hiring its first furniture buyer.

“We don’t want to damage the fact we’re a bedrooms specialist,” he said. “It has to fit comfortably with our core proposition.”

Worthington said furniture, which is sold in 160 of Dreams’ 248 stores, is already making a “significant contribution” to Dreams’ sales.

He added that the retailer was looking at concession opportunities, and was “in conversations” with a beds linen and accessories company.

The retailer has also introduced new room sets to 50 stores, and will roll these out across the estate.

But Worthington predicted there would be more fall out in the furniture sector.

“I can see a second tier of failures this year and possibly next year,” he said, adding that this year the consumer is feeling the pinch more compared with last year, with the downturn “now hurting the consumer”.

The retailer last week poached Harveys head of merchandising Warren Buck who will have the same role at Dreams.

Separately, Harveys has stopped selling bedroom furniture and will instead open concessions by its sister chain Bensons for Beds.