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Dunelm sets out plans for multichannel investment following 50% online sales growth

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Dunelm is planning further ecommerce investment after reporting multichannel sales up by more than 50%.

The homewares retailer says multichannel now accounts for 6% of sales and will continue to be a strategic focus as it aims to trade 200 stores alongside its “biggest shop window”, the online store Currently it has 140 stores.

Dunelm today reported a 4.8% rise in revenue to £356.3m in the 26 weeks to December 28, and pre-tax profits up by 2.9% at £61.6m. Like-for-like sales were down by 0.9% over the period, although they grew by 2.9% in the second quarter alone.

During first half, it saw more than 26m visitors on its website, and said that in the second quarter of the year multichannel sales accounted for about 6% of income. “Further profitable expansion of our multichannel operation,” said the company’s financial statement, “ is therefore an investment priority.”

Reserve & Collect and home delivery services were both a focus in the first half. Reserve and collect, said the company, is “the most profitable element of multichannel and importantly represents a third of our multichannel revenues.” Lead times from order to collection using the service, which enables customers to check availability in local stores and reserve for purchase, have been reduced to three hours. The company also moved to a new fulfillment facility in the run up to Christmas, enabling next-day delivery of 14,500 items. This meant the company could sell online closer to Christmas than previously.

Dunelm now plans to invest about £7m in multichannel including replatforming and a new website, expected to be launched in the first quarter of the next financial year. The money will also go into improving customer services and handling systems.

Chief executive Nick Wharton said: “”Whilst we are cautious about consumer spending trends overall, the combination of a customer offer that continues to appeal to a broad spread of consumers, a significant new store growth opportunity and an exciting multichannel agenda all provide us with a high degree of confidence in Dunelm’s future growth prospects.”

Dunelm started life as a ready-made curtain market stall business in 1979, before its first shop opened in Leicester in 1984. It listed on the London Stock Exchange in 2006.

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