Dunelm boss John Browett has shrugged off the post-Brexit gloom and said the retailer is benefiting from shoppers on the hunt for value.
After reporting 2.4% like-for-like growth in Dunelm’s fourth quarter, Browett said he was “very happy” with current trading – particularly given the current “soft homewares market”.
He said: “Post-Brexit trading has been good and we’re not noticing any drop in consumer confidence as of yet.
“Although we would never wish it on the economy, when the market is difficult, it presents opportunities for us, because shoppers start searching for value.”
Dunelm positions itself as a relatively “low-ticket” homewares retailer, with an average basket cost of around £38.
“It’s likely, therefore, that we will start picking up sales and we’ll also be able to expand our property a little quicker,” Browett said.
He added that, if people in the UK decide not to move house, they may spend more money “refreshing their homes”.
Browett said: “Dunelm has proven very durable in previous downturns. In these situations, sales are only really impacted when consumers become worried about their jobs. So, for now at least, so far so good.”
’Get on with it’
On the value of the pound, Browett said that, for the 20% of products that are directly sourced, Dunelm is fully hedged for the next 12 months, with partial hedging for the next 18 months.
“If currency has an impact, this won’t be felt until the spring and summer of next year, but there’s a lot that could happen between now and then – not least of all sourcing products in a different way,” he said.
Browett’s personal view on the outcome of the referendum, however, is that “the disruption probably wasn’t worth it”.
He said: “The country is where it is now, so we have to get on with it. There are problems but there will also be opportunities.
“It’s a phony war at this stage, and the impact depends entirely on how the politicians – whoever they turn out to be – lead us through it.”
In general, Browett said the homewares market has been soft in the past 13 weeks because of the inclement weather, the early Easter “bringing sales forward a bit”, and shoppers being “distracted” in the build-up to the referendum.
But he added: “It’s nothing more than the normal randomness of the market.”
He maintained that Dunelm is in a “very stable” situation and that its new-format store in Nottingham has “gone off like a rocket”.