Dunelm boss relaxed with supermarkets selling homewares as his stores remain closed

Dunelm’s chief executive has said he agrees with rules that allow big supermarket rivals to keep selling homewares while his business is forced to close.

Dunelm reported that it had lost market share when it was forced to close its shops in November while rivals could stay open.
Dunelm reported that it had lost market share when it was forced to close its shops in November while rivals could stay open.

Nick Wilkinson said that from a customer standpoint, it made very little sense to cordon off the aisle selling products for the home in essential shops, including supermarkets.

His comments came as Dunelm reported that it had lost market share when it was forced to close its shops in November while rivals could stay open.

However, it nonetheless reported a strong set of financial results for the six months to the end of December.

“We’d like to be open soon, we think our stores are safe. But we think it’s absolutely fine that stores that are open are permitted to sell homewares. Because otherwise it’s just a bit odd, isn’t it?” Wilkinson said.

“Some local districts tried to prevent that happening, but customers just said: ‘Look, I’m here, why can’t I buy a saucepan?’ And I think from a customer point of view, I’m sort of with them.”

Dunelm said that it lost market share during the period that its stores were forced to close.

However, when including the rest of the six months to Boxing Day, Dunelm said it “significantly outperformed the market”.

Pre-tax profit soared more than a third to £112.4 million on revenue of £719.4m, up 23 per cent. Its online offering was lively, seeing sales leap 111 per cent.

Now, after further restrictions which started in January, all but one of the shops – one in Jersey which opened last week as restrictions changed – are closed, Wilkinson noted.

At the moment, staff are on what the company calls a “furlough equivalent” scheme, which covers 80 per cent of an employee’s salary when they cannot work. However, the business has been able to find meaningful work for most of its approximately 10,000 staff.

The company’s garden furniture is selling strongly, despite snow over some parts of the country, as people prepare for summer.

Wilkinson said: “We’ve got very high sales right now of garden furniture, because actually the country ran out of garden furniture to buy in the middle of the first lockdown.

“Those goods are now coming in and we’re busy selling them as people get ready for another summer, probably of more time at home than they’d planned.”

Products that performed well over the six-month period include hygiene-related goods such as bedding, towels and cleaning products, while storage, lighting and desks also sold well.

However, sales grew across all categories, Wilkinson said.

The company’s curtain factory in Leicester produced 65,000 medical gowns to help fill a gap in personal protective equipment during the pandemic.

Analysts at brokerage Shore Capital said: “The outlook comments highlights not surprisingly near-term uncertainty but the CEO comments are upbeat highlighting both confidence about the future and the ‘challenger brand mentality’ suggesting a clear runway to grow both active customers.

“Dunelm remains a well manged business, leveraging the investments made in the online platform and remains what we call one of the best-in class retailers with strong cash generation capabilities and a tight focus on stock and cost controls.”

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