Dunelm sinks as Adderley founding family sells 10m shares

Shares in Dunelm fell on Tuesday after the homeware brand’s biggest investors sold part of their stake in the company.

Sir Will Adderley, who also serves as Dunelm’s vice-chairman, sold 10 million shares in the company at a value of £1,140 each through his holding company WA Capital, a stock exchange document shows.

That means WA Capital, which is also controlled by Adderley’s wife Lady Nadine, now holds a 37.6 percent stake in Dunelm on behalf of the family.

Dunelm shares fell almost 8 percent at the opening but recovered to trade down around 6.4 percent at 1,156p by mid-morning.

The group’s shares have risen by more than 10 percent over the past 12 months and by almost 40 percent in the past five months.

Dunelm started out in 1979 as a market stall selling curtains in Leicester, run by Bill and Jean Adderley, Sir Will’s parents.

Will joined the family business in 1992 and has held the position of CEO twice, leading Dunelm through its IPO in 2006.

Dunelm is now the most powerful player in the UK homewares market, with ambitions to control a 10 per cent market share. Rivals John Lewis and Ikea each have a market share of around 4 per cent.

One of its key strengths is its ‘broad price architecture’. You can buy a sleek Scandinavian leather sofa for £2,600 or a smaller ‘faux leather’ version for £469.

This has allowed the company to compete with discounters and attract a customer base from “all age groups, income groups and geographic groups”, chief executive Nick Wilkinson said earlier this month.

Analysts at UBS maintain a buy rating on Dunelm shares with a price target of 1,410p.

They said: ‘We expect (Dunelm) to benefit from a structurally competitive offering, leading to profitable market share gains in a recovering UK homewares market.

‘Dunelm has already demonstrated a consistent track record of share earnings, (pre-tax) growth and shareholder returns, even in the most challenging environments for the sector.’