Dunelm today reported growth online and in stores in the first six months of the year - and set out how it was planning in case of a no deal Brexit.
The multichannel retailer said that the costs of integration challenges of its acquisition of Worldstores were now behind it, and that the benefits could now be seen in growing online and multichannel sales. Dunelm bought Worldstores and the associated Kiddicare brand out of administration in 2016. Since then it has closed the Worldstores and Kiddicare websites, transferring product lines to the Dunelm.com website, built on the Worldstores technology platform.
The update came as Dunelm reported revenue of £551.8m in the 26 weeks to December 29, up by 1.2% on the same time last year. Like-for-like sales of £473.9m were 6.9% ahead of last time. Sales grew both online (+35.8%) and in-store (+3.8%), while customer numbers were also up across channels, growing by 4.3% in-store and by 18.7% online. Dunelm said that multichannel sales represented 15.7% of total sales in the first-half - up from 11.8% at the same time last year.
Pre-tax profits came in at £70m after exceptional items of £3.7m. That’s 16.7% up on the same time last year.
Chief executive Nick Wilkinson said: “It’s been a good first six months with our strong performance reflecting the focus we have placed back on the core Dunelm business. The like-for-like revenue growth, both in stores and online, demonstrates the progress we are making in improving our multichannel proposition whilst maintaining the breadth and depth of our specialist customer offer in homewares. On top of this, good operational discipline and keeping things simple, is driving a better financial performance.
“We traded well through our key Winter Sale period and remain pleased with our performance to date.”
The retailer says that it now plans to develop its multichannel customer experience with new flexible, scalable technologies enabling services such as click and collect. "We are focused on introducing the new platform in a way which avoids disruption to the strong growth we are already seeing through the existing dunelm.com platform," it said in today’s statement. "We therefore intend to phase the implementation via a beta site which is likely to be introduced to a small proportion of customers this summer. The pace of roll out will be contingent on the results from this initial launch. In the meantime, our existing platform is trading well, and we continue to see opportunities for further growth before we switch over."
Chief financial officer Laura Carr said that the retailer imported less than 1% of its goods from EU countries, but had taken action to buy and store extra stock of bestselling lines in case of port disruption in the case of a disorderly Brexit. The retailer said that it is working to keep the 2.5% of its staff that are EU nationals up-to-date with the latest information. “They will also be receiving our support to obtain ‘settled status if and when needed,” said Carr. The retailer is also hedged against a sudden decline in the value of sterling against the US dollar. She added: “The impact of significant macro-economic disruption to demand in the homewares market is difficult to predict and therefore we remain cautious.”
Wilkinson said: “As previously highlighted, we are cautious about the outlook for the remainder of the financial year due to the continuing political uncertainty in the UK. We are confident in delivering market expectations for the full year assuming no material change in the macro-economic environment.
“Looking to the future, we will continue to grow the business as we become a truly multichannel homewares destination, making Dunelm the first choice for even more customers, and further strengthening our market leading position."
Image courtesy of Dunelm