Dunelm forth-quarter underlying sales fall

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Dunelm forth-quarter underlying sales fall

08/07/2008 09:15

LONDON (Reuters) - Homewares retailer Dunelm reported a 2.4 percent fall in fourth-quarter underlying sales on Tuesday and said it was assuming trading would get tougher.

The firm, which sells home furnishings from 89 mostly out-of-town stores, said sales at shops open for more than a year rose 2.5 percent in the 52 weeks ended June 28.

Many retailers are struggling amid signs that shoppers are cutting back on spending due to higher fuel, food and mortgage costs.

Furniture and homewares groups are suffering more than most, with fewer people moving home and house prices falling. Sofa group ScS Upholstery last week went into administration, a form of creditor protection.

Dunelm said that, based on data from industry group the British Retail Consortium, it was taking market share in like-for-like sales.

Gross margin, a measure of profitability, had eased in recent weeks, in line with expectations, as some key supplier contracts became annualised, it said in a trading update.

Gross margin rose 60 basis points for the year as a whole.

Dunelm is due to report full-year results on September 11.

Its shares have outperformed the general retailers index <.FTASX5370> by about a third this year. They closed at 124.5 pence on Monday, valuing the firm at about 249 million pounds.

(Reporting by Mark Potter; Editing by Erica Billingham)

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