HOMEWARE giant Dunelm has revealed plans to axe around £100million of “unproductive” costs from the business as part of a fresh three-year growth strategy.
The shake-up comes after the retailer already slashed its central teams by around 8%.
Bosses say the cost-cutting drive will deliver savings by the 2029 financial year through restructuring and shaking up internal processes.
Dunelm confirmed that work is already well underway, with around 95 jobs axed across its support functions and distribution over the past three months.
The firm did not say whether further job losses are on the cards but confirmed that “targeted cost removal” from restructuring over the next three years will deliver around £40million of the annual savings.
Despite the cuts, Dunelm insists it is gearing up for growth, with plans to open new stores across the country.
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The chain is eyeing up around 100 potential locations for new shops, with up to 10 openings planned every year for the next three years.
Each new store is expected to create around 50 jobs, offering a boost to local high streets even as head office roles disappear.
Bosses also want to make greater use of artificial intelligence and automation to streamline how the business runs.
Plans are also in place to roll out hidden radio-frequency identification chips in products, known as RFID tags, to improve stock accuracy and availability on shelves.
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The news comes as Dunelm revealed that trading has been hit by the recent scorching weather, which has thrown shoppers’ usual spending patterns off course since the new financial year began at the end of June.
The retailer said conditions remain “challenging” for shoppers, pointing to high interest rates, inflation, and a shifting political landscape as key pressures on confidence.
As a result, customers are becoming more selective with their cash and increasingly hunting down promotions and discounts, particularly on non-essential homeware buys.
Despite the squeeze, Dunelm posted total sales of £1.83billion for the year to June 27, marking a 3.1% rise compared to the previous year.
Pre-tax profit, however, remained flat year-on-year at £211million.
Dunelm’s chief executive Clo Moriarty defended the shake-up, insisting the company is in a strong position to invest despite the tough retail climate.
She said: “Over the last year, we have taken a deep and honest look at our business and the opportunities ahead to better serve our customers and drive the group’s performance.”
She added: “This work has given us confidence that the opportunity in front of Dunelm is larger than we previously understood, but also that we need to evolve.”
Ms Moriarty continued: “The strength of our business and balance sheet means we are well placed to invest for the future and accelerate our growth trajectory.”