Dunelm Reopens Online Business & Updates On Financial Position

Dunelm Group PLC has released a business and liquidity update following on from the announcement made on 24 March 2020 in relation to the Coronavirus situation.

Operational update 

Following the government's introduction of nationwide social restrictions, we announced that we were temporarily closing all of our retail operations, across stores and online, in order to understand and comply with the new measures. 

Our priority has always been the health, safety and wellbeing of our colleagues and customers. In the days that followed our announcement, we took the time to fully assess the health and safety measures required within our home delivery and logistics operations to meet social distancing requirements¹.  We used external specialists, including NHS professionals, to help us implement many changes across our operations and only when we were satisfied that the operations were safe, and had received approval from Trading Standards, did we start to take orders again on Dunelm.com. 

After a phased restart of our online business, we are now fully operational, with the exception of some 2-man delivery products, which we anticipate will begin next week once we finalise a safe and workable delivery solution.  Since reopening, we have been able to satisfy a high level of online customer demand, with recent online order levels significantly higher than those seen prior to the onset of Coronavirus. 

Our stores remain closed, as per government guidance and the majority of our store colleagues have been furloughed under the government's Job Retention Scheme. Our Customer Engagement Centre colleagues are working effectively from home, responding to customer emails and calls. In preparation for re-opening, we are currently working on changes to our store operations that will help ensure colleague and customer safety. 

During the last three weeks, our colleagues across the UK have offered support in their local communities, helping people in vulnerable situations, care homes and hospices, and sewing laundry wash bags for health care workers in local hospitals. We are also pleased to support the NHS by working with them to produce medical gowns in our curtain manufacturing centre in Leicester. As a small thank you to all NHS and Emergency Service employees, we are currently offering all Blue Light Card members 15% off at Dunelm.com. 

Update on financial position 

As previously announced, the Group had existing financing facilities of £175m, consisting of a committed RCF of £165m (maturing in March 2023), which the Group has decided to draw down in full, and a £10m overdraft.  As at 11 April 2020, net debt was approximately £40m. 

In addition, we have now received confirmation from the Bank of England that we are eligible to access funding under the Covid Corporate Financing Facility ("CCFF").

The Board is confident that the Group has access to sufficient liquidity, even in the event of a prolonged store closure period. Currently, we would only anticipate the need to issue paper under the CCFF scheme in the event that our stores remain closed for a period greater than six months. 

We continue to focus on reducing operating expenses and tightly managing our cash flows. The executive management team have taken a voluntary 20% pay reduction.  Nick Wilkinson, our CEO, has taken a voluntary 90% pay reduction, and our Chairman and Non-Executive Directors have waived 100% of their fees.  These reductions will be in effect for the three months from April to June. 

Comment from Nick Wilkinson, Dunelm's Chief Executive Officer:

"We remain focused on doing the right thing for our colleagues, customers and the communities where we operate, and I am pleased that we have safely re-opened our online operations. I am immensely grateful for the dedication and commitment of our colleagues and supplier partners who have demonstrated great agility and determination in a dynamic and unprecedented situation. 

"Whilst many uncertainties remain, we have ensured that Dunelm and its many stakeholders will be well-supported through this difficult period and are confident that we will emerge from this crisis as a stronger business ready to return to sustainable and profitable growth." 

¹ More information available at https://www.dunelm.com/info/help/delivery

Source : Dunelm Group PLC

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