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Dunelm preparing to seize more opportunities through digital

Homeware and furniture retailer Dunelm said today (7 January) that multichannel development remains a priority, following encouraging second quarter trading.

Total like-for-like (LFL) revenue grew by 9% in the 13 weeks to 29 December 2018, with store revenue up by 5.7% year on year and online jumping by 37.9%. Multichannel revenue for the quarter, which is defined by the retailer as LFL online revenue plus sales made via its reserve & collect and tablet-based selling in-store, represented 16.5% of revenue and was up by 4.1ppts year on year.

Total revenue growth at group level was 2%, which reflected the closure of the Worldstores and Kiddicare websites previously announced.

Despite discontinuing the Worldstores brand, Dunelm is looking to put its 2016 acquisition to good use by leveraging the eCommerce business’s more robust technology to support the group’s digital operations going forward.

Last September, CEO Nick Wilkinson said that Worldstores’ technology will provide Dunelm with a more agile platform on which to run the retailer’s eCommerce offering, as opposed to relying on a third-party supplier. It will also allow for the launch of click & collect as soon as the new website goes live.

The new site was mooted for early 2019, but Dunelm said today it now expects this to materialise in its fourth quarter as it fine tunes the proposition and builds out its plans in the digital space.

In addition to disbanding Worldstores, Dunelm also recently ceased operating the Kiddicare business it acquired in 2016. Wilkinson said bringing all businesses under one Dunelm brand is helping to improve trading and financial performance, with the individual divisions viewed as unsustainable as separate entities.

"The positive like-for-like revenue growth both in stores and online, highlights the strength of our customer offer,” he explained.

“Our multichannel proposition is improving all the time, and we are looking forward to introducing our new web platform in the summer, using more flexible technology which will allow us to better serve our customers in a changing retail landscape.”

Wilkinson added that the retailer remains cautious on the outlook for the second half “given the ongoing uncertainty in the UK economy”, although he sees significant opportunities “by focusing on our customers and seizing opportunities in a digital world”.

Dunelm said it expects profit before tax in its first half of the year to be approximately £70 million after taking an impairment charge of £3.8 million in relation to its bedding brand Fogarty, which saw its key licensee enter administration during Q2.

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