Economy

United Kingdom retailer Dunelm warns on spending squeeze as sales fall

United Kingdom retailer Dunelm warns on spending squeeze as sales fall”

Profit before tax in the year to 1 July was £92.4mln, down 28.3% on a reported basis from £128.9mln last year, including £16.9mln exceptional charge related to the purchase and integration of Worldstores. Like-for-like sales, however, dropped 0.5% due to a lower footfall in stores.

Profits at Dunelm fell by nearly a third previous year after the homewares retailer was stung by costs related to its acquisition of Worldstores and falling store sales.

Dunelm announced in August that its chief executive John Browett was stepping down, and warned that its Easter trading had been slower than expected. The company said at the time that "the next phase of its growth requires different leadership".

Dunelm forecasted a challenging trading climate with British consumers' disposable income under pressure, but said it remains confident that the benefits of the Worldstores takeover will offset this.

The company had long enjoyed rising sales for its ranges of items such as cushions, bedding and kitchen equipment, but many consumers have reined in spending over the previous year.

Sales in the first two months of the new financial year "started positively", with good LFL sales boosted by favourable weather comparatives.

"Over the medium-term we are aiming to double our sales to £2bn, with 30 per cent-40 per cent from our increasingly important online channel".

"Nevertheless, we have a full programme of management actions underway to further improve the Dunelm customer proposition, both online and in-store, increase our business efficiency and support our colleagues".

Four new stores have already been opened in the new year of the eight openings planned.



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