Dunelm gives High St a much-needed boost
DUNELM shares rocketed by 20pc as the home furnishings retailer proved it’s not all doom and gloom on the High Street.
Sales are doing so well that Dunelm expects to make higher profits than forecast this year, bucking the recent trend for profit warnings.
Much of the boost – and the share price reaction – was down to the firm’s claim in a brief trading update that its new website was doing well.
Dunelm runs 170 superstores and two High Street sites, but the internet is still a key area of growth, and the 40-year-old company has made hay from the opportunity provided by online marketing and social media.
It benefitted this year after Instagram cleaning ‘influencer’ Sophie Hinchcliffe posted a picture of one of Dunelm’s £10 bamboo bath trays.
Fashionable outdoor clothing retailer Joules also put out an upbeat trading update that revealed revenue grew 1.3pc in the 26 weeks to November 24. It put this down to a ‘disciplined approach’ to discounting – which translates as running fewer discounts than many competitors.
Dunelm shares soared 19.6pc, or 163p, to 995p by the close, though Joules edged 1.8pc lower, down 4p, to 220p.
Fashion house Burberry was boosted by a report that French luxury group Kering had expressed an interest in taking over Italy’s Moncler. The latest rumours of mergers and consolidation in the luxury goods sector come hot on the heels of LVMH’s £12.5bn takeover of US jeweller Tiffany – and hint that more could be coming.
Burberry’s stock climbed 3.1pc, or 62p, to 2050p as investors regained confidence in the sector, which has lagged amid the USChina trade spat and the worldwide economic slowdown.
The wider FTSE 100, however, suffered as the value of the pound continued to climb higher.
Sterling has made gains alongside rising expectations that next week’s general election will hand the Conservative party a majority, avoiding a hung Parliament.
When the pound grows stronger it weighs on the dollar- denominated earnings of overseas multinational companies, such as
HSBC (down 1.2pc, or 6.5p, to 552.3p), Unilever (down 1pc, or 45.5p, to 4475p) and British American Tobacco (down 0.7pc, or 19.5p, to 2955.5p).
The FTSE 100 as a whole fell 0.7pc, or 50.65 points, to finish at 7137.85, while the FTSE 250 – which is less sensitive to currency movements – rose 0.2pc, to 41.85 points, to 20707.33.
Online trading group Plus500 advanced after one of its founders, Alon Gonen, raised his stake by 500,000 shares – splashing out £ 3.5m. Plus500’ s stock closed 3.3pc higher, up 25.6p, to 792.2p. Magazine and events firm Time
Out Group lagged after it issued a mini profit warning. Its shares fell 1.6pc, or 2p, to 124.5p, after it told investors there would be a ‘modest impact’ to profits because a couple of its food courts in North America opened later than planned.
Stagecoach and Berkeley Group both fell on downgrades from brokers at Liberum. Failing to see further opportunity for gains in housebuilder Berkeley, analysts downgraded its stock from ‘hold’ to ‘sell’, sending its shares 1.4pc lower, down 63p, to 4549p.
Stagecoach was pushed from ‘buy’ to ‘hold’, on the expectation that whichever party wins the General Election is likely to interfere in transport services. Stagecoach fell 2.2pc, or 3p, to 131p.
Packaging group DS Smith posted a 31pc rise in profits to £213m in the six months to October 31. But shares tumbled 7.2pc, or 27.1p, to 351.8p on the back of weak paper prices.