Sofa surge puts a spring into Dunelm sales

Dunelm reported a 3.5 per cent rise in quarterly sales as the homewares retailer held down costs to grow market share.
The FTSE 250 company reported revenues of £403 million in the 13 weeks to September 28 as a rise in volumes provided a boost to the retailer.
The company said that its strong sales performance was in part due to its expanded product range and demand for its sofa collections.
Online purchases, including click and collect, made up 37 per cent of Dunelm’s total sales, during the 13 weeks to September 28, up 2 per cent from the same period last year as the company continued to expand its digital presence.
Despite the increase in sales the homewares chain said it had continued to experience “volatile trading conditions” during the first quarter.
Nick Wilkinson, the chief executive, said the retailer had “ delivered robust sales growth over the first quarter” but that it was “yet to see meaningful change in underlying consumer sentiment in our markets.”
Last month the FTSE 250 retailer set out its strategy to target a 10 per cent market share in the medium-term by expanding its product offering. Dunelm added that it was on track to open between five to ten new stores this financial year as part of its expansion plans.
Dunelm started out in 1979 as a market stall in Leicester run by Bill and Jean Adderley, who sold factory seconds of curtains and soft furnishings. It now has 176 shops and 10,000 employees, with the Adderley family holding a 45 per cent stake.
Despite its traditional beginnings, Dunelm was one of the pandemic’s success stories as people used lockdown to refurbish their living areas. The company is one of only a few homewares retailers to have enjoyed continued success since the pandemic as its range of affordable furnishings remains in demand.
Manjari Dhar, an equity analyst at Royal Bank of Canada, said that although the homewares market remained subdued there were early signs of a recovery in bigger ticket and more discretionary categories, given improvements in consumer confidence. “We believe that Dunelm is continuing to gain market share, helped by its value proposition and wide range assortment,” Dhar said.
Shares in Dunelm rose 6p, or 0.5 per cent, to close at £11.99.