Dunelm boss warns of impact of further lockdowns

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National homewares giant Dunelm said it came out of lockdown stronger than it went in, with online sales doubled at the height of the crisis.

But it warned that despite the resilient homewares market, the future remained unclear because of doubts over the wider economy and the potential impact of further regional and national lockdowns.

The business said the impact of the pandemic meant total sales for the last 12 months were £1.06 billion – around 4 per cent down on a year earlier.

Pre-tax profits, meanwhile, were down more than 13 per cent at £109 million.

Chief executive Nick Wilkinson said: “We made good progress before the onset of Covid-19, building our digital capabilities, extending our product choice and value, and broadening and deepening our customer base.

“These unprecedented times have confirmed the strength of the Dunelm business model, with our integrated online and out-of-town stores proposition, broad product range, long-term supplier relationships, strong cash generation and operational grip.

“Our colleagues have been an inspiration throughout, living our shared values, and I would like to thank them all for their adaptability and resilience.

“These recent months have taught us about our ability to innovate at pace and we are emerging stronger as a result, giving us the confidence to accelerate our strategic priorities, all of which focus on being customer first.

“Growth in the first two months of the new financial year has been significantly ahead of our expectations, reflecting both pent up demand following the store closure period and a resilient homewares market.

“Our customers have adapted quickly to shopping safely in our mainly out-of-town superstores and we continue to see strong growth in our home delivery offer.

“Whilst the year to date performance has been materially ahead of our initial expectations, it is very difficult to provide any meaningful guidance on the future outlook given the uncertainty in the wider economy and the potential impact of further regional or national lockdowns.

“However, we remain confident in our ability to adapt to the environment and are well positioned to continue to grow market share and help even more customers create a home they love.”

The Leicestershire-headquartered retailer said in the eight months prior to lockdown, sales had been up almost 9 per cent.

Overall, online was up 50 per cent year on year, according to its preliminary results for the 12 months to June 27.

The chain shut its online operation and stores when the lockdown began at the end of March.

Since then it had reopened all 173 stores, while its website went through a phased reopening from early in the lockdown.

The results showed the business, which has almost 10,000 staff, saw:

• Strong recent trading with total year on year sales growth of 59 per cent in July and 24 per cent in August, due to pent-up demand, the timing of its summer sale and the solid homewares market

• Digital currently accounting for 31 per cent of total sales, with online home delivery sales growth for the last two months up around 130 per cent compared to the prior year

• Board decide not to recommend a final dividend for the last year but, assuming “no further material impact from Covid-19”, anticipate an interim dividend in the new financial year.

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