Homewares specialist Dunelm reported disappointing H1 results, with profits falling 26%, as the retailer struggled to strike a chord with consumers in-store and started the integration process with Worldstores.
Sales during the period were underwhelming, which Dunelm attributed to a weak market and warm weather.
The retailer’s profits also weren’t helped by unexpected one-off costs stemming from issues with a new depot.
The only saving grace for Dunelm is the growth of the retailer’s online business, which has markedly outperformed store sales. Online is Dunelm’s greatest opportunity, particularly since its acquisition of Worldstores, which includes online business Achica and multichannel retailer Kiddicare; and has the potential to be a key source of differentiation from competitors such as IKEA and the grocery chains.
Online, combined with the opening of five more stores by the end of the financial year, and store refits will help drive growth for Dunelm in a challenging 2017 market. The retailer is clearly addressing its shortcomings, which bodes well for Dunelm’s performance in the second half of its financial year, and suggests Dunelm can outperform the overall homewares market in 2017.
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