Dunelm warns Red Sea ship delays hitting profit margins

HOMEWARE retailer Dunelm says the Red Sea shipping crisis is hitting its bottom line, as cargo ships have to avoid the region, delaying deliveries and increasing transport costs.

- Geoff Ho

Chief executive Nick Wilkinson said during the first six months of Dunelm's current financial year, its gross margin improved by 160 basis points, from 51.1% to 52.7%, due to its tight focus on costs, disciplined approach to discounts and lower freight outlay.

However, for the full year Dunelm only expects its margin to have improved by 100 basis points, due to adverse currency movements and the attacks by Houthi rebels on a key world shipping lane.

Mr Wilkinson said: "We are managing the impact of ships taking longer, more costly routes as they avoid the Red Sea."