Furnishings retailer Dunelm predicts £21m fall in profit
Dunelm said profit for this year could drop by as much as £21m, as the home furnishings retailer assesses the impact of coronavirus on sales.
The company, which sells furnishings ranging from cushions and bedding to kitchen equipment, was forced to close its store network for several months under lockdown rules — relying on its online sales alone.
Dunelm said it now expects a pre-tax profit of between £105m and £110m for the full year to the end of June, compared to £125.9m a year earlier.
Dunelm had previously forecast full-year pre-tax profit to come in slightly above market expectations in February, as online sales growth charted higher in the first half of the year following an update to its web shopping platform.
Total sales in April and May were down respectively 78 per cent and 48 per cent year on year.
In a bright spot, the retailer said total sales in June had risen 20 per cent as consumers were able to visit its shops. During the fourth quarter, it reported a record 105.6 per cent jump in online sales.
Social distancing measures within stores and distribution have led to extra costs for the short-term of around £150,000 per week, the company added.
Thanks to the boom in online sales, Dunelm said it expects technology costs to rise by around £8m in the new year as it puts cash back into its online platform.
“The decisions we have made over the last few months have been guided by our principles and values and we are emerging from this unprecedented period as a stronger business,” said Nick Wilkinson, Dunelm’s chief executive officer.
“This has given us the confidence to accelerate our digital transition and introduce new ways of serving our customers. There is lots more to do and we are energised to evolve our customer proposition and operations at pace, as we continue to navigate an uncertain external environment.”