Dunelm’s profit push goes on

Dunelm, which started life as a Leicester curtain stall in 1979, has been one of the bright spots in a difficult retail market in recent years, taking on small and independent competitors with its expanding footprint.

Profits for the six months to December 29 were in line with City expectations at £59.8m, having seen a 13.4 per cent jump in revenues to £340.1m.

Like-for-like sales were 2.2 per cent higher in the half-year but progress on this measure will be harder going forward due to tougher comparisons with a year earlier.

Chief executive Nick Wharton said the company’s work on improving customer service and its online offering was paying off.

He added: “With a specialist proposition which continues to appeal to a broad spread of customers, Dunelm has continued to outperform the overall homewares market.”

Dunelm has a medium-term target of 200 outlets after the opening of ten new superstores in the half-year took its estate to 123 stores. The company’s performance has been helped by its ‘New Lower Prices’ campaign and demand for its ‘Teddy Bear’ textile range of blankets, cushions, rugs and mattress covers.

Freddie George, retail analyst at Cantor Fitzgerald, said: “The company has a clear niche in a category where competition is fragmented.”

He added there was an opportunity to improve margins by growing own label, direct sourcing and developing its multi-channel offer.