Dunelm’s profits slide after Worldstores deal

PROFIT at Dunelm fell by almost a third last year after the homewares retailer was stung by costs related to its acquisition of Worldstores and falling store sales.

The firm, which has five stores here, reported a 28.3% fall in pre-tax profit to £92.4m in the year to July 1.

Like-for-like sales dipped 0.5% in the period, with comparable store sales falling 2.4%. Overall revenue rose 8.5% to £955.6m.

Dunelm pointed to a “challenging and subdued market environment” and also pinned the profit fall on losses at recently acquired Worldstores and increased investment.

Chairman Andy Harrison said: “Dunelm has made good strategic progress over the year, most notably with the acquisition of Worldstores, which moves us closer to our goal of being the biggest and best multichannel homewares retailer in the UK.

“We expect the trading climate to remain challenging with the disposable income of UK consumers under pressure.”

The news comes after Dunelm warned in February that costs were starting to rise in the face of the Brexit-induced collapse in the value of the pound, resulting in a more “challenging” retail environment.

But Mr Harrison chose to focus on the future, indicating that the group was still aiming to double sales to £2bn, driven by its online offering.

Dunlem said sales in the first two months of the new financial year had started “positively”, with good like-for-like sales boosted by favourable weather.