Dunelm has tough first half but e-tail continues to soar

By

Sandra Halliday

Published
Feb 8, 2017

UK interiors and homewares retailer Dunelm had a tough time of it in the first half as pre-tax profits plunged 26% on the back of a generally weak market and its own supply problems.

In the 26 weeks to year-end, it made £55.9m, down from £75.5m a year ago, even though sales rose 2.8% to £460.5m. But that sales rise was driven by store expansion as it added new locations and the meant comparable sales dipped 1.6%.

What went wrong? Customer footfall was dented by unusually warm weather in Q1, although there was a recovery in Q2 as the new-in offer (especially the Christmas ranges) resonated with shoppers.

Also on the plus side, online was buoyant with a 20% bounce, even though product availability was dented by a slower-than-expected start of the firm’s new depot.

The company’s CEO John Browett said it continues to increase its market share while the acquisition of Worldstores enhances its leading position in homewares and also enables acceleration of online and furniture growth.

Browett added: "We are in a transitional year and it has been a particularly busy first half - while we are operating in a challenging retail environment, especially in homewares, we remain focused on investing in and developing our business for the future. Trading was slightly softer than we would have liked due to a weaker market, [but] we continue to increase our share.”