Broker snap: Dunelm has room to grow

2nd Oct 2009 13:12

Dunelm, the home furnishings retailer, is not widely known inside the M25 area of London which gives it plenty of scope for expansion, reckons Singer Capital Markets.The out-of-town retailer has just 85 stores across the UK with many regions unrepresented. The chance to move into new areas without the risk of cannibalising sales from its existing stores represents 'the core driver behind the investment case,' Singer claims. The broker has a 'buy' recommendation on the shares.Dunelm has 'all the key building blocks' in place to expand, having invested well in infrastructure and logistics, and could open up to 15 shops per annum in the next three years, according to Singer's projections.