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Dunelm pulls back into profit as online investment saves the day

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Dunelm has revealed that its online sales soared by 85.2% in Q2, returning the homeware retailer to profitability in June.

While, total sales were down 49.7% for the quarter ended 27 June – an aggregate of a fall of 78% in April and 48% in May – the retailer believes that earlier investment in digital has saved the day.

The retailer says that its digital fulfilment channels were operating at record levels, with home deliveries also hitting an all-time high. This has put extreme pressure on its business, forcing longer lead times and made it harder to hit service levels. However, the company says that earlier investment in its digital platform helped meet these demands, especially the exponential growth in online sales over such a short timeframe.

As a result, the group expects a full-year profit before tax of between £105 million and £110 million, against profits of £125.9 million reported the year prior.  It is also maintaining a cautious outlook, because demand across the year remains uncertain thanks to the pandemic. It also notes that social distancing measures across its stores, which have led to increased operating costs of around £150,000 a week, could continue.

Nick Wilkinson, CEO of Dunelm, said: “We are incredibly proud of how our team and committed supplier partners have responded during the pandemic and of what we have achieved together. Our colleagues have demonstrated exceptional commitment, agility and resilience to adapt our proposition and operations and I would personally like to thank them all.”

He added: “The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business.  This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers. There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment.”

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