Dunelm Group DNLM Unprecedented levels of uncertainty have forced Dunelm to delve deep into the jargon drawer in an attempt to mask its half year and fourth quarter problems.The one strong area has been online sales which rose by 37.9% during the 13 weeks to the 29th December, as against like for like store revenue which only managed growth of 5.75 in the same period. The retail industry can not even begin to comprehend that the shopping public has staged and is continuing to stage a massive rebellion against the big stores. And who can blame them ? Massive increases in the cost of public transport with journeys of 15 minutes costing a fiver each way per adult. That immediately adds 20 pounds to the supermarket bill. Unless you are a councillor, parking costs are exorbitant and the queues to get into a car park or shopping mall make the whole experience unpleasant.Far better to stay at home, put your feet up and do it online in warm pleasant surroundings.
The really bad news can not be hidden. Total growth at group level came in at 2% after store closures and over six months the figure was even worse at 1.2%. By Dunelm standards these are fairly poor figures but a sign of the times. Management boasts that gross margins have been improved but only by the sleight of hand of closing down low margin stores and businesses. Despite the importance of online sales management has had to delay the launch of its new website to quarter 4 because it needed to “evolve and optimise its plans” which raises the question as to why it did not opyimise them in the first place. The company no longer counts the number of stores it has (169) but shows how mod it has become by claiming it now has a store footprint, which really is nonsense English.
Full year profit before tax is expected to be modestly ahead of the top of the range current analysts forecasts. The Chief Executive regards the first half performance as a strong one but is cautious about the outlook for the second half. Perhaps he had better pull his finger out and hurry up with that new website.
Churchill China plc CHH has enjoyed a strong finish to the year and the operating performance for the year to the 29th December will be ahead of current market estimates. Growth in export markets has remained strong and the UK performance improved in the second half.
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