14 June 2024, 04:41
By Furniture News Sept 09, 2021

Demand drives profit growth at Dunelm

In its preliminary results for the financial year ended 26th June 2021, Dunelm cites "very strong sales growth" of +26% (against 21% in 2019), despite its stores being closed to customers for more than a third of the year.

Dunelm says it made significant market share gains (up 1.6% pts to 9.1%), and achieved active customer growth of +8.5%, driven by strong growth across its digital channels.Indeed, digital sales grew by +115%.

Profit before tax stands at £157.8m, (+45%).

CEO Nick Wilkinson comments: "We delivered an excellent performance in FY21, despite our stores being closed for more than a third of the year, demonstrating the strength and resilience of our business model and the adaptability and commitment of our colleagues and suppliers.   

"The digital investments we had made enabled us to rapidly adapt to the changing environment and deliver strong growth and an improved customer experience. We are emerging from the pandemic as a stronger and better business, having transitioned from being a physical retailer with digital aspirations to being a proven, digital-first, multichannel retailer.

"We have renewed purpose, bold ambitions and an increased opportunity to attract more customers and grow their frequency. We aim to be our customers' first choice for home, helping everyone to create the joy of truly feeling at home, now and for the generations to come. Our business plans will deliver for all our stakeholders, and include our commitment to a Net Zero Pathway, with an absolute reduction in emissions of -50% by 2030.

"Whilst the macro-outlook remains uncertain and we are seeing some industry-wide issues such as ongoing supply chain disruption and inflationary pressures from raw materials, freight costs and driver shortages, we feel well placed to continue managing these challenges.

"Trading in the first 10 weeks of the new financial year has been encouraging, with growth against strong comparatives and continued market outperformance."

Dunelm's board expects that this year's profit before tax will be modestly ahead of the top analyst expectations.

Dunelm plans to develop its homewares and furniture proposition by "raising the bar on range development", stating: "We are adapting our mix of good/better/best price points and the size of our promotional buys. We are now using online customer insight to increase choice and fill in gaps in those categories that we know are more frequently shopped. We will continue to extend our range in new and developing categories, such as Decorate, Outdoor Lighting and Sofas & Chairs. Additionally, we will introduce new collections and sub-brands created by our in-house designers, for example NHM in collaboration with the National History Museum, and the expansion of Churchgate, a timeless brand which draws on Dunelm's heritage. 

"We are committed to introducing more sustainable products and are building capability to accelerate the introduction of new materials and circular sourcing into the design and manufacturing process. We will also be broadening our sustainable The Edited Life range to more categories, following the launch of our made-to-order sofa range (made from recycled materials, and designed for longevity with a 25-year guarantee).

"We will also improve the range of furniture available for quick delivery and grow the geographic coverage of our own home delivery network. This will be enabled by our new furniture warehouse (in Northamptonshire) as well as investments into supporting supply chain and transport systems. We will also be extending customer support hours and offering shorter response times."

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