Chairman Andy Harrison commented: “We have made good strategic progress in the first half, best highlighted by the 36.8% like-for-like growth in our online sales (including reserve and collect), which now account for 18.5% of our total sales, up from 11.7% last year.”
He noted that over the period, Dunelm’s gross margin was lower “due to the mix effect of acquired Worldstores sales and a higher proportion of end of season and seasonal products”.
Dunelm purchased the assets of the WS Group, which consisted of Worldstores, Kiddicare and Achica, for £8.5 million in November 2016. Worldstores is a UK online retailer of products for the home and garden. Kiddicare is a multichannel retailer, selling nursery supplies and merchandise for children and young families. Achica is a members-only online lifestyle store offering furniture, homewares and accessories at discounted prices for limited periods through flash sales.
Andy continued: “The integration of Worldstores is progressing well, with cost and efficiency programmes on track, and benefits of extended ranges on Dunelm.com sales being achieved – although we have seen a weaker sales performance in the legacy Worldstores business (including the transitional Dunelm Extra website). The scale of the opportunity to fully integrate Worldstores’ capabilities into Dunelm remains compelling.”
He added: “Having run the Achica business for a year, and gained a better understanding of the business and its customers, we decided that the brand does not fit with the core Dunelm proposition. On February 15 we completed the disposal of the Achica business for a cash consideration of £600,000.”
According to Achica’s website, it is now part of online retailer BrandAlley, a members-only designer discount site that is host to over 500 fashion, beauty and home brands. A message on Achica’s home page reads: We’re delighted to announce that Achica is now part of the BrandAlley family. This means you now benefit from the full range of amazing deals available on both Achica and BrandAlley, including homeware, clothing, footwear accessories and beauty.’
Looking ahead, Andy said: “We expect a more stable margin performance in the second half which, together with reduced losses and increased integration benefits from the acquisition, should deliver good full year profit growth.”
On February 1 Dunelm welcomed Nick Wilkinson as chief executive. He was previously chief executive of cycling specialist Evans Cycles, a position he held from 2011 to 2016. “We are confident that Nick’s leadership skills and retail pedigree will help us to deliver our ambitious growth plans to build Dunelm as the leading multi-channel retailer in our space,” Andy said.
Dunelm bills itself as the market leader in the £12 billion UK homewares market and active in the £11 billion UK furniture market. It operates 173 stores – of which 169 are out-of-town superstores and 4 are located on high streets – and three online stores at www.dunelm.com, www.worldstores.co.uk and www.kiddicare.com. It sells around 30,000 product lines in-store, increasing to around 300,000 online.