Dunelm riding out lockdown roller coaster with strong sales

Leicestershire’s Dunelm has thrived during the pandemic, with sales rising dramatically in the second half of 2020.

Total sales for the homewares group were almost £720 million for the second half of 2020 – 23 per cent up on a year earlier.

The business said that was partly down to more people shopping online, which grew to more than a third of all sales.

The rate of year-on-year growth was down slightly in the last three months of the year as stores in some areas were forced to shut – but with the percentage of people going online inevitably up.

Chief executive Nick Wilkinson said: “Our strong performance continued into the second quarter, whilst we adapted to the various restrictions and resulting store closures across our estate.

“I am immensely grateful for the engagement and resilience of the Dunelm team who, along with our suppliers, have demonstrated their outstanding commitment to our core value of being ‘stronger together’.

“We enter 2021 with further restrictions, and our primary focus remains the health and wellbeing of our colleagues and customers across the business.

“Beyond this near-term uncertainty, we’ve never felt more confident about the future.

“Our scalable proposition combines an in-store and digital offer which, with agile technology, we will continue to develop at pace.

“As our homes play an increasingly important role for all of us, we are well placed to build even closer relationships with our customers and extend our market leadership.”

Dunelm was famously started by the Adderley family selling ready-made curtains on Leicester market in 1979.

The first shop opened in Leicester in 1984, and over the following years the business developed into a successful chain of high street shops before expanding into out-of-town superstores.

The business employs around 10,000 people and sells approximately 50,000 product lines.

In a trading update for the three months to Boxing Day, the Syston-based chain said: “The majority of the store estate was closed for a four-week period during November, Welsh stores were closed for a 16-day period from mid-October and many stores were again impacted by further regional restrictions implemented towards the end of December.

“Throughout the quarter, consumer demand for homewares remained buoyant, and when our total retail system, including stores, was fully open, we performed significantly ahead of the market.

“Our online home delivery business has more than doubled since the same period last year as we continue to enhance the digital customer experience and ramp up our operational capabilities.

“Click and collect has remained popular with customers, equating to an average of 30 per cent of prior year comparable store sales during periods of closure.”

The business said it was in a strong position despite the economic uncertainty, with net cash of £141 million – compared to net debt £68 million a year earlier – and access to £175 million of unused banking facilities.

In an update on the current market situation, the business said 174 stores were closed, with all but five of them operating a Covid-secure and contactless click and collect service.

Home delivery services continue to operate as normal.

The company ssaid: “Our first priority remains the health and safety of our colleagues and customers.

“At the beginning of the pandemic, we took rapid and significant steps to introduce prudent and safe operating protocols across our operations.

“We have maintained and monitored these practices throughout the year to ensure that we continue to improve and operate to the very highest safety standards.

“As previously announced, the board decided to repay the £14.5m Job Retention Scheme (JRS) monies claimed in the prior financial year and we are not making further claims.

“Furthermore, to protect our most vulnerable colleagues and those not working due to the current restrictions, we have introduced a company-funded ‘furlough’ equivalent scheme.”

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“Whilst the supply of goods from Asia has been disrupted by port operations and global container shortages during the quarter, typical delays are now only 2-3 weeks,” it added.

“At the half-year end, stock on hand levels remained slightly below last year and we have higher goods in transit.

“We expect to rebuild stock levels during the second half of the year.”

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