Dunelm high street stores grow, but are outstripped by online boom
Shares in Dunelm rose almost six per cent in early trading as the company showed strong growth online despite closing three websites.
Like-for-like revenue grew 4.2 per cent year-on-year in store and online in its first quarter, but group takings remained flat after it shut down three websites earlier this year.
Although in-store and online growth was down from 9.3 per cent the year before, revenue from its online platform grew by a third, £4.1m more than in store, despite representing just over a tenth of overall revenue.
Including in-store tablet sales, online rose 50.8 per cent.
However, Dunelm was forced to close struggling websites Worldstores.co.uk, Achica.com and Kiddicare.com, which it bought for £8.5m only two years ago, moving their lines moved to Dunelm.com earlier this year.
When including the drop in revenues from these, the company posted online revenues of £30.5m in the quarter, down from £36.9m a year ago.
The company relocated one store last quarter and is committed to another relocation in the coming months.
Chief executive Nick Wilkinson said: “We continue to improve the multichannel experience for our customers and our stores play a vital role in this.
“I am pleased at the progress we are making with tablet-based selling in store to offer our full product range to all our customers.
“Whilst we are cautious about the months ahead due to the level of market and customer uncertainty, I see plenty of opportunity over the medium term as we continue our journey to become the leading multichannel retailer in our sector, helping our customers create homes they love.’’
Shelly Xie, an analyst at RBC Capital Markets, said: “We think the outlook for the UK homewares market remains tough – a combination of a challenging consumer environment and soft housing market will continue to pressurise discretionary spending on homewares.
“While there are opportunities going forward, we think Dunelm’s medium term’s £2bn sales and market share target look ambitious.”