// Dunelm has hired one of the UK’s most high-profile chief executives, Whitbread’s Alison Brittain as chair designate
// The homewares retailer revealed full-year profits would beat expectations as shoppers continue to invest in their homes
Dunelm has hired Whitbread chief executive Alison Brittain as its new chair as it reveals that full-year profits will be ahead of expectations.
Brittain, one of the UK’s most high-profile chief executives who has previously sat on the board of M&S, will join the Dunelm board in September, before succeeding Andy Harrison as chair before his nine-year term expires next September.
The homewares retailer was one of the big winners during the pandemic, when shoppers spent more time and money in their home, and this good performance has continued as Dunelm revealed that pre-tax profit would be slightly ahead of analyst consensus of £207 million for its year to 25 June.
Particularly strong profitability in its first half when store sales bounced back following Covid restrictions being lifted, and continued robust trading led to the profit uplift.
Dunelm chief executive Nick Wilkinson said: “Dunelm is a much bigger and stronger business than before the pandemic, with sales over 40% higher, due in large part to the huge strides we have made to develop our digital capabilities. Our growth continues to be driven by increasing market share as our customer base further expands.”
Sales across the year were up 16% year on year to £1.55 billion, although revenue in the final quarter dipped 6%. However, Dunelm said it faced tough comparatives due to the pent up demand last year when stores had just reopened following the third lockdown.
Online sales were down 11 percentage points to £537 million over the year, as ecommerce was the retailer’s only sales channel for some of last years when stores were shuttered.
Ecommerce sales are 2.5 times higher than pre-Covid levels and digital now makes up 35% of Dunelm’s sales.
Gross margin rate was 40 basis points lower than last year at 51.2%,, primarily due to high customer participation in its Summer Sale event last month, however, the retailer believes gross margin will return to a long run average in its current financial year.
Wilkinson added: “”The macro outlook remains uncertain and we cannot predict exactly how consumers will respond to the increasing pressures on their finances.
“We are currently seeing customers adapt to this environment in their own ways, utilising the breadth of our offer and price points across homewares; value and choice has always been at the very core of Dunelm, and we are intensely focused on continuing to strengthen this for our customers.
“The business has successfully navigated previous periods of consumer uncertainty. With the inherent strength of our business model and strong operational grip, we have never been more confident about our ability to make the right long-term decisions for all of our stakeholders and to continue to grow our market-leading position.”
Brittain said: “Dunelm is a company I have long admired as a customer and I love that it’s an entrepreneurial, purpose-led business with strong values and lots of ambition.
“The last two years have reinforced the importance of the home in all of our lives, and I am delighted to be joining a team with such a fabulous track record of focussing on delivering value for customers and a company with fantastic opportunity for future growth.”