The UK’s leading homewares retailer reported an increase in sales, largely driven by its home deliveries division.
Dunelm, based in Syston, said sales for the year to July 1 came in at just over £901 million, up from £881 million last year.
The company said it was “particularly pleased” with the strong growth of its home delivery sales which it said was due to continued development of what it offers online and the launch of Worldstores products on the Dunelm website.
Dunelm acquired Worldstores, including its Achica and Kiddicare brands in November last year.
Worldstores is one of the UK’s largest online retailers of home and garden products with over 500,000 products on the site.
Achica is a members-only online store offering furniture, homewares and accessories and Kiddicare is a multichannel retailer, selling nursery supplies and merchandise for children and young families.
With the addition of Wordstores products on Dunelm’s website, Dunelm said around 20 per cent of total sales are now generated online.
Like-for-like sales, which exclude sales from newly opened stores, were down 0.5 per cent on the year, compared to a rise of 2.5 per cent in 2016.
Worryingly though, Dunelm said pre-tax profits for the year would be in the range of £109 million to £111 million, down from £129 million last year.
Dunelm also updated the market on trading for the fourth quarter.
It said total sales for the fourth quarter rose by 17.7 per cent to £240 million. Total revenue, excluding Worldstores, increased by 6.7 per cent to £217.4 million.
Total like-for-like growth grew by 3.8%.
Investors were cheered by the news and stock market listed Dunelm saw its shares rise by 27p, or 4.5 per cent to 624p in early trading [FRI].
However, this is still way off its year high of 932p last September.
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Chief executive John Browett said: “The Worldstores acquisition will provide a massive leap forward to our online and store offer that we think our customers will love.
“The integration is going well and we are confident in the benefits it will generate. With around 20 per cent of our sales now generated online, we believe that we have arrived as a significant e-commerce player in homewares.
“We’ve seen a good quarter of trade with positive like-for-like sales growth and a very strong online performance. Encouragingly, we continue to take market share.
“We continue to invest in the business for the longer term to improve our customer proposition and infrastructure and, despite an uncertain consumer environment, we go into the next financial year with some good momentum.”
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Leicestershire’s retailers are enjoying mixed fortunes. While it is encouraging to see Dunelm’s apparent reversal of fortune, fashion giant Next is going through a torrid time.
In May the Enderby-based fashion giant announced a drop in sales, blaming a “challenging” consumer market.
The company said full-price sales in its first quarter were down 3 per cent while total sales, including markdown sales, slipped 2.5 per cent.
Next also issued a profit warning, reducing the upper end of its group full-year profit forecast to £740 million, down from £780 million previously.
Its shares have been in free-fall for months. They have fallen from a peak of £80 a share to around £38.
Shares in Topps Tiles recently tumbled nearly 3 per cent after the UK’s biggest tile retailer blamed falling sales on continued weak trading conditions.
The Enderby-based tile specialist said revenues for the 13 weeks to July 1 fell 4.7 per cent, reflecting “continued weaker macro-economic conditions this year and a strong period of performance in the prior year when the business was benefiting from the increased level of housing transactions resulting from stamp duty changes in April 2016”.