Dunelm sales wilt in hot weather
Britain's hot summer weather left homewares chain Dunelm nursing a steep fall in sales as the July heatwave saw customers shun its stores.
The out-of-town and online retailer, which has 135 stores across the UK, posted a 5.3% drop in like-for-like sales over its first quarter to September 28.
It said sales fell "significantly" in July amid one of the country's hottest summers for years, but had returned to growth by the end of September thanks to cooler weather.
Chief executive Nick Wharton said: "T he hot weather made it a difficult start to the quarter for Dunelm with trading in the early weeks significantly affected by lower footfall."
Shares fell 4% as the sales decline marked a further decline on the 2.8% seen in the previous three months.
But analysts said it was encouraging that sales had returned to growth by the end of its first quarter.
Freddie George, retail analyst at Cantor Fitzgerald, said: "We believe that the weak sales are a sector one-off and will recover in the second quarter."
He added Dunelm should also stand to benefit from the current property market revival.
Dunelm recently reported a 12.3% leap in annual pre-tax profits to £108.1 million and announced a special dividend worth 25p a share to be paid next month, giving investors a £50.7 million boost, on top of a 16p annual ordinary dividend.
The windfall payments mean the chain's founders will see their personal fortune swell by another £46 million.
Bill and Jean Adderley, who set up the business in 1979 as a market stall business selling ready-made curtains , still own a 55% stake in the group together with other family members.
According to the latest Sunday Times Rich List, the Adderleys joined the billionaires' club this year with an estimated combined wealth of £1.1 billion after Dunelm's value soared.
Bill and Jean are no longer involved in the day-to-day running or management of the business, but their son and former chief executive Will Adderley remains on the board as executive deputy chairman.
Dunelm, based in Syston, Leicestershire, has seen shares rise by more than 40% over the past year, with store expansion helping it offset a slowdown in trading.
The group opened 14 stores in the year to June 29 and has another 12 in the pipeline.
It is also growing its website trade and saw online sales account for around 4.5% of total revenues at the end of its last financial year.