IRUK 500

Dunelm and DFS: four multichannel themes from homewares retailers

IRUK Top500 retailers Dunelm and DFS both published the latest figures this week. Here’s what they had to say about their multichannel strategies.

Online growth
Top100 retailer Dunelm [IRDX RDUN] reported total sales of £452.4m – discounting the effect of its acquisition of online retailer Worldstores – in the six months to December 31. That was 1% up on the same time last year. Total like-for-like sales, which discount the effect of store openings, closures or business acquisitions and disposals, fell by 1.6%. Within that, store like-for-like sales fell by 3.1% to £389.4m, while home delivery sales – mostly made online – grew by 20.1% to £33.7m. Pre-tax profits of £55.9m were 26% down on the same time last year before the effect of the Worldstores acquisition.

Its acquisition of the Worldstores group of online retailers, which also includes nursery retailer Kiddicare, through a prepackaged administration, helped to raise total sales to £360.5m, or 2.8% up on the same time last year. Overall pre-tax profits, including the effect of buying Worldstores, came in at £67m, 11.3% down on last time. The retailer says the deal will improve its position in the homewares market and help it to grow online and furniture sales. But in the short term the disruption to the Worldstores business as a result of administration has led to early losses of £1.8m in the first five weeks of ownership and is expected to mean lossses of between £5m and £10m in the current year.

Chief executive John Browett said: “Our home delivery channel continues to perform well and our acquisition of Worldstores will accelerate our online capabilities and growth potential.”

Top250 retailer DFS [IRDX RDFS] reported 7% sales growth in the 26 weeks to January 28 in a trading update. The furniture retailer, which also owns the Dwell and Sofa Workshop brands, said that its sales reflected a growth strategy that included the continued development of an omnichannel proposition.

Emphasis on stores in the multichannel model
Dunelm says stores remain at the core of its multichannel strategy, despite the growth of online and falling like-for-like store sales, and it plans to continue its strategy of opening new branches in order to grow to an estate of 200 stores. Five opened in the first half, and five are expected to open in the second half; currently it has 161 stores.

“The future is a multichannel world with our stores remaining at the core of our offering,” said Dunelm’s Browett in his review. “We need to continue to ensure though that our stores are a delight to visit because, in homewares, customers will always want to see colour, pattern and texture which are hard to render online and where they are looking for inspiration. The online business is increasingly important, and will be a critical part of our future. It will drive growth in all categories, both in the short term but also long term after the store rollout is complete. The acquisition of Worldstores accelerates our online strategy and brings us a combination of scale, technology and delivery capability, especially in furniture. We will therefore continue to invest to deliver both a fresh and attractive store format and a strong online offering.”

DFS said that it would be growing through a “measured programme of store expansion and retail space release in the UK and overseas”.

Cross-channel fulfilment
Dunelm introduced dropshipping in order to broaden its range in areas including rugs and lighting. In the second half of the year it will develop its use of mobile tablets in the store as it looks to improve customer delivery options. It will also introduce a full click and collect service. It said that integration of its one-man fulfilment process into its Stoke distribution centre was a “significant step towards broader fulfilment options and improved efficiency in the medium term.”

Internet retailing in-store
Dunelm is introducing mobile tablets to the store and says its new point-of-sale system helps staff sell its full range from the shop. It is also trialling new in-store formats and says those that opened with a new format are trading better than forecast, while three refurbished stores show “promising” levels of trade.

Mentioned in this piece…

Dunelm

Dunelm

IRDX: RDUN

Dunelm Group plc (formerly Dunelm Mill) is a major British-based home furnishings retailer with over 100 stores and over 40 implant Pausa coffee shops throughout the United Kingdom. One of the largest homewares retailers in the United Kingdom, Dunelm’s headquarters are based in Watermead Business Park, Syston in Leicestershire. It also has its own UK factory for curtains, blinds and accessories also based in Leicester.

It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.

(more…)

DFS Trading

DFS Trading

IRDX: RDFS

DFS is an international furniture retailer in the United Kingdom and Ireland which specialises in sofas and soft furnishings.
The company developed its eCommerce channel by integrating store-based expertise, offering live video help on its website. (more…)

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  • InternetRetailing