Dunelm annual like-for-likes up 8%

Dunelm saw an 8.0% rise in like-for-like sales in the year to July 3 2010, the retailer said in a trading update today.

Dunelm annual like-for-likes up 8%

However, the growth in like-for-likes slowed markedly from 15.4% in the first half to just 0.8% in the second, and was marginally negative in the final 10 weeks, reflecting strong comparatives in the previous year.

The out-of-town homewares specialist enjoyed an overall sales rise of 18.2% as turnover grew to £492.8m.

Gross margin continued to increase year on year, thanks mainly to successful management of old stock, and over the financial year as a whole gross margin is expected to be 46.8%, an increase of 190 basis points.

The retailer also expects operating profit for the year to be a little ahead of current market expectations.

Dunelm said it had developed its offer over the year, including piloting a new version of its kitchen department. The furniture and storage departments were also reinvigorated and a Dunelm gift card was launched.

With 10 superstore openings achieved in the financial year, the group now trades from 94 superstores and 10 older-format high street stores, and hopes to grow the superstore count to between 150 and 200.

However, chief executive Will Adderley warned that it might not be possible to maintain last year’s rate of like-for-like sales growth in the coming 12 months “as consumer spending has to absorb tax increases, public sector cuts and, potentially, interest rate rises. We also think it will be hard to achieve further gross margin gains, with uncertainty over sterling and recent increases in freight costs affecting imported products,” he said.

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