Insider Media Limited

Dunelm, the homewares retailer based in Leicestershire, has warned that it faces “a number of external factors” that could hinder its growth over the coming months. The cautious outlook was given as the company revealed like-for-like sales over the 26 weeks to 1 January 2011 had declined 1.2 per cent.

However, despite the slight decline, total sales for the half grew 8.5 per cent. Over the period, seven new superstores were opened. The company now has plans to open a further eight stores over the next year.

Like-for-like revenue growth of 2.1 per cent in the first quarter was offset by a decline of 4.2 per cent in the second, leading to a decline over the six month period.

Will Adderley, chief executive, said: "We have continued to develop our business successfully during the half and we were delighted to celebrate the opening of our 100th superstore at the beginning of December. The business is in good health operationally and we remain in a very strong financial position.

"However, trading conditions have been tough in our most recent quarter, especially in our peak trading weeks in late November and early December and this has had an impact, albeit limited, on both revenues and earnings.

"Looking ahead we are facing a number of external factors in our market which could affect both consumer demand and bought-in costs for a period of time. However, we are very confident that we can use our strong financial position and entrepreneurial flexibility to trade our way through this period and build an even stronger business for the long term. We will continue to expand through our strong pipeline of new stores, refits and further investments in support of our strategy.”