Dunelm’s festive sales rise as unicorn-themed products prove popular | Business

Shares in home furnishings group Dunelm surged after it upgraded its profit expectations, thanks to a better-than-expected rise in sales likely to go against the grim trend for retailers’ Christmas trading figures.

Sales in its core Dunelm brand increased by nearly 10% to £304m in the 13 weeksto 29 December, boosted by a slicker online operation and the popularity of unicorn-themed goods, from bedding to rocking horses. A spokesman said sheepskin rugs had also proved popular with shoppers.

The Leicestershire-based company’s stock climbed by more than 11% on the back of the figures, which had to be released earlier than planned due to regulatory guidelines on financial updates that differ significantly from forecasts.

Dunelm said it was cautious about making predictions due to “unprecedented levels of uncertainty currently facing consumers and businesses in the UK” but strong sales mean it is likely to report full-year profits modestly ahead of analysts’ projections.

The Dunelm chief executive, Nick Wilkinson, said: “We are pleased with our overall performance in the first half, and are helping more customers than ever to create a home they love.

“By focusing back on our core business, under one Dunelm brand, we are improving our trading and financial performance.”

Wilkinson was referring to the completed integration of Worldstores, which Dunelm bought out of administration in 2016 and has previously proved a drag on profits due to low margins.

Dunelm has jettisoned a range of less profitable products and shut down the websites of Worldstores’ brands, including Kiddicare, focusing instead on using its website to improve sales of the highest margin products.

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The website is being revamped in a bid to capitalise on rising online sales, although the launch will be delayed until the company’s fourth quarter, it said.

While web sales proved the fastest-growing part of the business, up 38% during the period, overall web sales of £36.1m are still a fraction of the £246m in revenues racked up in store.

Sales in Dunelm’s 169 stores increased by 5.7% after a TV marketing campaign helped entice customers from the sofa to the showroom, where staff have also begun using iPads to better demonstrate homewares.

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