Ultimately any CEO has to get on with young Will. In short he's v smart & v v driven. Basically he owns & has built the business - & has a very clear agenda where he's going with the business. This is a very different proposition from most senior corporate posts. Not all managers can take or are at ease with that. Also I reckon young Will sees CEOs mechanical tools which he's buying in - so when the work requirements change he changes the tool. Whatever he pays the CEO is money out of his pocket, so it's a sharp relationship & as I say not the usual corporate luvvy-duvvy routine.
I am not party to all the goings on but chatting to staff etc is gossip which seemed to indicate that there was some blame attatched to individuals that might have had some truth. However, as John Browitt bought a block of shares after he departed, perhaps there was some mutual agreement here?
The fact it that there have been many staff meetings recently at all levels so the Board are aware that some problems did exist in dealing with communications and stock control etc while the Group keeps growing so, with the report and the increase in the SP, there doesn't appear to be anything to complain about.
Baissez moi. Thats a jaw droppingly good IMS. Q3 lfl strong & superb in context of generally awful retail environment/market & generally woeful Mar18 month due v v bad weather/snow killing footfall (cf BDO). GM% decline effectively bottoms out q3. Core down (as expected, but these are largely one off step declines) & WS clearly being knocked into shape. Q4 guidance implies the general margin scenario is cusping on a strong turnaround, so the WS acquisition looks to be working v well. No wonder the sp is rocketing (+12% so far).
Thanks to the last two posters for their positive opinions with which I am in agreement even though at this moment I am showing a 27% loss. I have not lost faith in Will Adderley as he has shown greater success as a retailer than most of his competitors.
I just wish he was as skillful when it comes to selecting upper management to help him organise much needed improvements in DNLM's administration especially at this critical stage in the Group's growth. I hope the latest appointments to the Board can prove more positive than the recent examples.
I wish them great success and I am still buying as they themselves are! All INMHO.
It is not hard to see why investing in Dunelm might be a tough call for most punters. In the past five years, the share price of the homewares retailer has been extremely volatile, falling from just shy of £10 a share in March 2016 to 578½p yesterday.
Dunelm, which began life as a market stall in Leicester in 1979 before listing in 2006, has suffered more than its fair share of management turbulence. John Browett, its chief executive, left abruptly in August after less than two years in the role amid an apparent backlash over his management style. Nick Wharton left similarly suddenly in September 2014.
Leadership of the company has been entrusted now to Nick Wilkinson, former boss of Evans Cycles and a former McKinsey management consultant, who started his new job this month. Key to his success will be an ability to get along with the founding Adderley family, who hold more than 50 per cent of Dunelms shares. Mr Wilkinson will have to find himself a new chief financial officer, too, after Keith Down said yesterday that he was stepping down for personal reasons.
In a retail sector beset with rising costs and inflation, Dunelm, which sells bedding, curtains, furniture and kitchenware, has to cope with a variable housing market and fickle consumer spending. Add in the fact that the groups acquisition of Worldstores a lower-margin rival that owns Kiddicare and Achica, two online retailers is taking longer to integrate than planned and it is clear to see why there may be other retailers that are easier stock picks.
That said, there is more than enough to recommend Dunelm as worthy of holding a position in an investors portfolio. It remains a highly cash-generative business, with an eye-catching 4.6 per cent yield, and analysts forecast that it will return to special dividend payments by the end of 2019. In time its acquisition of Worldstores will benefit the company, even though the units losses of £5.6 million in the first half are higher than expected and are hurting the gross margin.
Dunelms takeover of Worldstores was designed in part to accelerate its push into online sales and to improve its technological capabilities. Worldstores listed more than 500,000 home and garden products on its site and was considered to have advanced back-end online technology. This should help Dunelm, which has been slower than it should have been in seeking a larger share of the ecommerce sector.
The Worldstores acquisition aside, Dunelms main business is trading fairly well in a highly challenging market in which bigger rivals, such as Carpetright, are suffering. Interim figures showed that store like-for-like sales were up 3.5 per cent and online sales up by 36.8 per cent. Overall like-for-like sales are up 6 per cent and the group is gaining market share in a homewares market that for most operators is broadly static.
Dunelm has 173 stores that are well spread around the UK and it has maintained a good reputation for value and quality in a market that is deeply sensitive to price. Annual sales are approaching £1 billion and the group is hoping to double that in time, with ecommerce accounting for up to 40 per cent of overall sales. It plans to do this by improving the quality and breadth of its range, making its stores better to shop in and easier to navigate, and cutting costs, while driving online sales.
The share price rightly was hit yesterday by the continued Worldstore losses and integration issues in a tough first half, but this could be a buying opportunity as there is medium-term growth ahead.
(ShareCast News) - Barclays downgraded its stance home furnishings retailer Dunelm to 'equalweight' from 'overweight' on Wednesday and slashed the price target to 630p from 810p following "disappointing" first-half results and commentary on Worldstores.
The bank said pre-tax profit of £60m was 5% below is estimate, while the downgrade to guidance for Worldstores - which is now expected to incur a pre-tax loss of £7m to £8m for the year - is concerning.
"Although we still believe the acquisition provides Dunelm with a better online platform than it had previously, we think the process of consolidating websites and reaping the benefits of the combined businesses may be slower and more challenging than we had previously anticipated," Barclays said.
In addition, it highlighted concerns about store profitability, noting that while core Dunelm's online business has been growing well, in-store like-for-like sales have been less impressive. If this continues, it could hinder operating leverage as several store costs are relatively fixed in the medium term.
"Ultimately, we recognise the drivers of the story including store roll-out, improved online capabilities and an optically cheap valuation; but we lack confidence on execution in the near term."
The bank cut its underlying pre-tax profit estimate for 2018 to £114.5m from £122.2m and its estimate for 2019 to £128.6m from £141m. For 2020, it now sees underlying pre-tax profit of £143.7m from £165.9m.
Losing the CEO and then the CFO in short order is bound to unsettle the market. Until we see what the new boys can do there will be a negative weight on the company. The problem with new boys is they usually want to put their own mark on the company, and that often involves undoing what their predecessors did, and that will cost.
Looks like DNLM SP will remain in the doldrums for some time.
Mr Mkt having a conniption here, as only reading the headline & not the detail. WS on track for breakeven this fy (thereafter I'm only assuming v moderate profit, but all retailers have to have a web arm). Core business solid. Factors depressing margin overwhelmingly one offs & are investment in the growth of the business. DUN seem to be working on an internal plan of ca 300 stores, which is a feasible UK footprint. Still a class act in my view; WA knows his onions & I think is focussed to an end sale to private equity.
I believe it was more likely the change- over period from sales goods to arrival of new spring/ summer in that particular store as the local one near me is working night shifts to get everything rearranged as the sales have ended and new stock is arriving in big quantities. Takes some effort in a store like DNLM with thousands of items to be checked while setting up new seasons goods. It will be interesting to read the results on 13th March. Jaymac3
I'm always wary of 'anecdotal evidence' as one can read way too much into one data point but I visited one of the larger Dunelm stores today and could immediately see why sales are not as good as they should be: much of the merchandise is not priced. So, for example, a whole range of pans on display (looked rather nice and I was tempted to buy a set) not one had any price indication. By the tills I was looking at some items but could not see a price on about half of them and a lady next to me turned around and said "there's no prices on any of this is there?". As I was leaving I stopped to look at some suitcases - none of which had a price label. As I searched through about 8 tags (none had a price on) a security guard stepped in and said "This one is £x and these are £y". Good for him and he should get a bonus a raise or a promotion. But how about the manager getting his or her staff together and saying "Let's go through this store and make sure every single product is priced up"?
It's what's called retail detail and from what I saw today Dunelm are not good at it, which comes down to management and training.
p.s. oh and the lady on the till tried to charge me £40 for an item which did have a nice clear price label on it - but it said £32. Not impressed.
I am not familiar with the Trustpilot website so I checked out a few other well known brands on it. Many are voted worse than Worldstores. Perhaps the site is used more by disgruntled customers than satisfied ones. If the statistical sample is biased then the results are questionable. That said, Dunelm comes out very well.
To argue that the fall in shares is attributable to the trustpilot survey is, in my opinion, weak, since there has been no noticeable deterioration in the comments; they were receiving bad ones at the start of the survey in 2009.
Class act. Can't fault this. Strong headline t/o growth. Clearly dominating the market sector (ie better than John Lewis). Margin dilution essentially a handful of one offs as largely integration of WS acquisition + aggressive rollout leads to a series of step changes in investment. These will unwind h2 & along with a lull in rollout will lead to a significant recovery in margin & especially cash generation. Key issue is the potential store footprint. Original target 200 st looks light to me in context of UK retail. Is it 250 st as the previous CEO commented? If it's split the diff, say 225 st, which I think it's quite feasible, then DUN looks outrageous to me, with an exit to private equity ca 5 years down the road.
Been in this one since more or less the get go & I think I'll be around quite a while yet. As ever more or less ignored by the city (?!), which will throw up buying opportunities.
Jefferies is backing strong online businesses like Boohoo (BOO) in 2018 as consumers continue to spend cautiously this year.
Analyst Caroline Gulliver retained her buy recommendation and share price target of 280p saying the online fashion retailer had consistently beaten high sales growth expectations and expected it to continue to do so.
The shares climbed nearly 9p or 4.7% to 197.3p.
2018 could be another tough year Inflation is expected to ease into the second half of 2018, which should provide some relief. However, with real GDP growth expected to slow, ongoing Brexit negotiations and rising interest rates, we think consumers will spend prudently in 2018, she said.
In light of this, in the UK we have preference for discounters like B&M who are well positioned for any weakness in the consumer environment, strong online retailers like Boohoo, retailers with compelling self-help stories like M&S and Kingfisher, or retailers with strong brand equity like Ted Baker.
Gulliver told investors to avoid cyclically-leveraged retailers like Dunelm, or operationally challenged retailers like Sports Direct.
(ShareCast News) - Dunelm shares were boosted by a note from Deutsche Bank on Friday, anticipating an upbeat update next month covering the Christmas period.
Deutsche upped its share price target for Dunelm to 685p from 640p, with its recommendation remaining 'hold' following a challenging 12 months but where like-for-like sales and space expansion have recently accelerated and the integration of acquired online business WorldStores appears to be performing on track.
Looking forward to the homewares retailer's post-festive update in January, analysts forecast a solid performance due to modest comparatives and from faster online growth due to the added WorldStores ranges.
LFL sales are predicted to be up 2% and total sales 12.9%, including £15m perimeter effect of consolidating the final two months of WorldStores.
With slightly more optimistic second and third quarter sales assumptions, analysts increased forecasts 3%, implying Dunelm trades on 13 calender 2018 P/E ratio with a 7% free cash flow yield.
DB retiatered 'buy' ratings for Associated British Foods, B&M European Value and Boohoo as its top picks in the non-food retail sector.
IMV the Worldstores offering will make the difference going forward.
Dunelm are succeeding as they offer choice, quality and good value. Ours is always busy, even though they are competing locally with B&M x 2, and Home Bargains. You want skandi, they've got it, traditional, got that. Ready to hang curtains, or made to measure, got those as well. Funky lighting fills the gap left by BHS, the prices are not silly as in Next Home and M&S Home, and the kitchenware and tableware ranges last a few years so you can top up. For me, as a keen value shopper (and value share trader) this appears under-valued at present relative to good potential for upside.Go into a shop and see for yourself!
Dunelm & some other retailers are downstream from housing. They start as being a royalty on housing transactions. Though aggregate housing transactions are flat lining, new builds largely being sold to FTBs are racing away with construction/sales rising exponentially. Of course FTBs need to fill their new build homes with 'stuff' (a highly technical term). How many homes do you know that don't have towels, crockery, bedding, sofas etc etc etc etc???? So - Dunelm, purveyors of fine Stuff to the gentry.
They have just opened a new Dunhelm in warrington - replacing an old run down building by the railway tracks - bigger shop with much improved offerings in a really nice environment and a cafe - on a retail park just off the M62 - i can't set it failing to increase sales.
Jefferies do seem way too low with their price target even compared with others so your post has lots of merit although them highlighting the price recovery over it's peers holds some truth to me. Will be interesting to see over the Xmas period how retail & DNLM perform.
06 Dec 17 Jefferies International Underperform 717.50 515.00 560.00 Retains
05 Dec 17 Peel Hunt Hold 717.50 620.00 620.00 Retains
18 Oct 17 Barclays Capital Overweight 717.50 - 860.00 Reiterates
13 Oct 17 JP Morgan Cazenove Overweight 717.50 760.00 760.00 Reiterates
12 Oct 17 Deutsche Bank Hold 717.50 630.00 640.00 Retains
I cannot agree with Jeffries opinions as they are way out of touch with what is happening under the revised management's operations which do not appear to known to these "analysts ". This has happened previously and I am left wondering just where they get such incorrect wild guesses from and who do think would pay any attention to them.
Jefferies believes the rally in Dunelm (DNLM) shares is overdone and it will struggle to grow enough to meet expectations. Analyst Caroline Gulliver retained her underperform recommendation but increased the target price from 515p to 560p. The shares fell 4.5p to 705p esterday.
We believe the 28% increase in Dunelms share price 22% versus the sector over the past five months is overdone as we estimate that for Dunelm to reach its market share ambitions it would require a 7.5% like-for-like for eight years, she said.
Without investment in margins, this seems a stretch to us given competitive pressures from discounters and other retailers with a higher net promoter score [a measure of customer loyalty]. Hence, with our full year 2018-19 forecasts 8-9% below consensus, we maintain an underperform.
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