Online shopping saves Dunelm

The kitchenware retailers have still found reason to be happy this month, despite their high street stores struggling
 Dunelm looks to turn profits into new stores

Despite a good start to 2012 in the hype of January sales, Dunelm’s March figures have revealed a downturn in figures from their stores.

However, their online sales have managed to salvage the third quarter, to produce a 0.3 percent profit margin.

Dunelm are infamous for their largely out-of-town store locations and have consequently thrived as a result of this. However, recent events have made the accessibility of the branches more questionable.


Only nine of their 120 stores are high-street city branches, while the remaining 111 have suffered as a consequence of the recent petrol problems, making consumers less enthused about travelling long distances to shop.

Keeping in line with modern day trends though, the internet has come to the rescue once again, and taken like for like sales in the first 13 weeks of the year to a 0.6 percent increase. This is a small decrease on the previous 26 weeks though which saw an overall rise in sales of 1.1 percent.

The period immediately after Christmas, during March and April, is notoriously difficult for retailers anyway, once the sales end and expendable income is diminished. Dunelm will be hoping that the next quarter is boosted back in the stores by some new branches opening.

Exeter and Stafford have already welcomed the kitchenware, bedding and rugs specialists, and Dunelm have highlighted their lofty ambitions by plotting a further 80 stores to add to their repertoire. This would take the empire to a nice round 200.

Nick Wharton, Dunelm Chief Executive believes this is an achievable goal if they continue to progress.

“It is prudent to remain cautious about the wider economy and, recognising its impact on consumer confidence, we will maintain our disciplined approach to the management of gross margin and operating costs,” he explained.

“However with a clear growth strategy and strong pipeline of new stores ahead we remain confident in the future prospects for the business.”

Freddie George, an analyst at Seymour Pierce Stockbrokers, has warned that the company’s online impact will force them to compete with some of the biggest names in the business though.

“‘The success of the Dunelm brand is very much on other retailers’ radar screens so, we believe, competition is intensifying - both Next and M&S are developing their home ranges in store and on the internet.”


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