Dunelm blames upheaval for second year of falling profits
Retailer Dunelm has blamed management upheaval, a hit from a recent acquisition and difficult trading conditions for its second year in a row of falling profits.
The home furnishing group posted a 6.7 per cent fall in underlying pre-tax profits to £102m for the year to June 30.
Its figures were knocked by an £8.4m hit from the Worldstores takeover, which it completed in November 2016.
Chairman Andy Harrison admitted the group had let “some of our basic retail disciplines” slip due to management changes and the “distraction” of its Worldstores acquisition.
Like-for-like sales rose 4.2 per cent, with stores seeing growth of 1 per cent and online up 37.9 per cent.
Mr Harrison said: “The year under review was complicated by a combination of management changes, the integration of Worldstores and a fragile economic environment.
“However, the appointment of our new chief executive, Nick Wilkinson, in February brought cohesion and impetus to our strategic thinking and as a board we are pleased with the immediate progress he has achieved.”
On a reported basis, pre-tax profits rose 0.8 per cent to £93.1m.
The group has seen shares come under pressure after a series of profit warnings since spring, with falling consumer confidence and challenging trading adding to its woes.
It also endured a shake-up at the top, with Mr Harrison forced to step in last year after former chief executive John Browett stepped down at the end of August for “personal reasons” after a brief stint in charge.
Recently appointed boss Mr Wilkinson, who started in February, said the group was acting to shore up profits and boost sales with a further push online, including a new IT system for Dunelm. com.
TOUGH CONDITIONS:Dunelm had let ‘some of its basic retail disciplines’ slip.