Dunelm hails strong growth as bosses reveal profit upgrade
Homewares retail chain Dunelm has revealed it was one of the big winners on the high street – defying the gloom, tightening costs and boosting profits.
As a result of the 19.4% boost in pre-tax profits for the six months to December 28 to £84.9 million, bosses added they expect full year profits to beat analysts’ expectations. Revenues also rose 6% to £585 million during the period.
The company said the boost came thanks to not taking part in Black Friday or any other pre-Christmas promotions, along with cutting back costs.
A new website rolled out in October also helped and tablets in stores to allow customers to order there was also a boost.
Chief executive Nick Wilkinson added: “The third quarter has started well, with a successful Winter Sale across the total retail system. As a result, we expect full year FY20 profit before tax to be slightly ahead of the top of the latest range of analyst expectations.”
There have been fears that the coronavirus outbreak known as Covid-19 could slow down production in China, where factories are closing or cutting back production.
But Mr Wilkinson said: “We are monitoring the coronavirus outbreak carefully. To date we have not assumed any material disruption to our supply chain or any financial impact in the year.”
In the year ahead, the boss said he plans to open two or three new superstores and will shortly trial a small 5,000 square foot site on a high street.
He explained: “This store opening is a low-cost test to understand how our customers react to a smaller, edited range in a location chosen to increase our reach.”
Online-only products will also grow, with 6,000 lines added this year, he added.
The homewares market has suffered in recent months, dropping 1.4% in the first half of the financial year. But Dunelm said it grew 2.3% during the period – an indication it is winning customers from rivals.