Sunday 22 July 2018

Rocking unicorns help Dunelm deliver Christmas cheer

The retailer said like-for-like sales lifted 3.4% over the 13 weeks to December, with a 31% leap online making up for lacklustre store sales.

Dunelm said demand for best-sellers including rocking unicorns and surging online sales helped drive a rise in festive trading
Dunelm said demand for best-sellers including rocking unicorns and surging online sales helped drive a rise in festive trading

By Holly Williams, Press Association Deputy City Editor

Demand for “rocking unicorns” and surging online sales helped homewares group Dunelm notch up a rise in festive trading.

The retailer said like-for-like sales lifted 3.4% over the 13 weeks to December, with a 30.5% leap in online sales making up for a more lacklustre 1.1% rise across its stores.

Dunelm said children’s products were among its star festive performers, with rocking unicorns and rocking horses among best-sellers.

Candles were also in strong demand over Christmas, according to the group.

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Its solid second-quarter performance saw it buck an otherwise tough homewares market and left its first half like-for-like sales 6% higher.

But Dunelm’s shares fell 5% as the group revealed that profit margins were lower than a year earlier after launching more end-of-season sales as part of a drive for more “newness” in its ranges.

It said this was also down to the addition of lower margin sales from the acquired Worldstores business.

Dunelm insisted it was still on track for “good” full-year profit growth despite the margin hit.

It hailed its performance online, which now accounts for 16% of total sales.

Andy Harrison, chairman of Dunelm, said the group was “well on the way to becoming a genuine multi-channel retailer”.

He added: “Overall, we remain on track, with good sales growth and market share gains, offset by margin mix.

“We are well positioned to deliver good full-year profit growth, after a small reduction in the first half, largely due to the consolidation of Worldstores losses.”

Dunelm opened five new stores in its second quarter, taking its total estate to 169.

No more store launches are planned for the second half.

Analysts at Jefferies said Dunelm had “shrugged off the impact of a soft homewares market”, but said that profit estimates would be trimmed by up to 2% as a result of its margin warning.

Dunelm recently appointed Nick Wilkinson as its new chief executive after previous boss John Browett stepped down earlier this year for “personal reasons”.

Mr Wilkinson, who will take up the role in February, joins from private
equity-owned retailer Evans Cycles, where he held the top job for five
years.

In August last year, Dunelm said Mr Browett, who was appointed chief executive in 2015, had made “good progress over the last two years”, but added that the next “phase of growth requires different leadership”.

Press Association

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