Dunelm and DFS are rocked by High St woe but bargain retailer B&M is booming
Homeware retailers Dunelm and DFS warned on profits after a summer heatwave kept customers out of shops.
DFS shares plunged 10.5 per cent in early trading as shoppers swapped sofas for sun loungers.
The retailer blamed ‘exceptionally hot weather’ for hitting order numbers over the last three months and warned business would continue to be tough over the next year.
Struggle: A 42 per cent rise in online sales at Dunelm was not enough to offset waning interest. Store sales dropped 4.6 per cent in the three months to June 30
Orders were also affected by delays of made-to-order sofas from the Far East, causing sales to drop 3 per cent in the 23 weeks to July 7 compared with a year earlier.
DFS now expects full-year profits to come in lower than last year’s £82.4million.
But B&M is booming
Bargain retailer B&M has defied High Street gloom with its garden furniture and camping gear proving a hit with shoppers.
Sales at the chain, which sells everything from barbecues to dog food, jumped 21.3pc in the three months to June 30 compared with a year earlier. Same store sales in the UK climbed 1.6pc in the same period.
Yesterday Sainsbury’s chairman David Tyler accused bargain chains of ‘salami slicing’ away its sales. B&M chief executive Simon Arora said the record sales were ‘testament to the appeal of our highly-disruptive business model’.
Jonathan Pritchard, an analyst at Peel Hunt, argued that the business is still strong. ‘If DFS has a cold, we’d imagine that the competition are in retail hospital,’ he said.
‘DFS is in an enviable, market-leading position, tapping into a wide demographic and addressing the online issue as well.’ Shares recovered to end the day 0.7 per cent higher at 200p.
Meanwhile, a 42 per cent rise in online sales at Dunelm was not enough to offset waning interest.
Store sales dropped 4.6 per cent in the three months to June 30.
The firm, which sells bedding, sofas and curtains, has been plunging investment into its online business as it grapples with the High Street crisis.
It bought home furnishings website Worldstores in 2016, which owned the Kiddicare and Achica websites, but has been struggling to integrate the businesses, forcing it to sell off Achica this year.
Dunelm said profits for the full year were likely to drag below expectations after it paid out a one-off £8.9million charge for merging the firms and took on £8.5million of their losses.