Trading Statement

Dunelm Group plc
09 January 2007



9 January 2007


                                DUNELM GROUP PLC

                                 TRADING UPDATE


Following the end of the first half of its financial year Dunelm Group plc
("Dunelm" or the "Company"), the specialist homewares retailer, today makes the
following comments on first half trading.

The Board is pleased to confirm that sales for the 26 weeks to 30 December 2006
have continued to demonstrate the strength of Dunelm's "Simply Value For Money"
customer offer:


Total sales:                             £178.4m (2005: £157.6m)
Total sales growth:                      + 13.2%
Like for like sales growth:              + 5.0%


The Company's store expansion programme has continued and in the period to 30
December 2006 new superstores were opened in Stevenage and Colchester. In
addition the superstore in Swansea was relocated to a larger unit. At the period
end, the Company was trading from 83 stores under the Dunelm Mill fascia, of
which 66 are out-of-town superstores.

73 stores are included in the like for like ("LFL") population; stores opened or
re-sized since 3 July 2005 will not be included until financial year 2007/8 in
line with Dunelm's LFL definition.

As explained at the time of its IPO, the Company has been implementing its
transition to a new central warehouse facility in Stoke. Non-recurring costs
arising from this transition totalled approximately £1.0m in the period. In
addition the rental cost for the new facility amounted to £0.6m in the half
year; there was no such rental cost in 2005/6 when the Company's warehouse
operations were run from its freehold facility in Burton-on-Trent.

The first half of 2006/7 also includes an amortisation charge of £0.7m in
respect of the new IT systems implemented last March. There was no such charge
in the first half of 2005/6.

Non-recurring costs associated with the IPO amount to £3.0m.

Despite these anticipated changes in the cost base, the underlying profitability
of the business remains strong and is in line with management's expectations.
The Board remains confident in Dunelm's financial and trading prospects for the
year as a whole.

Will Adderley, Chief Executive of Dunelm, commented:

"The last six months have seen a significant milestone in the development of the
Company, with our successful IPO in October. Just as importantly, the business
has delivered a strong performance in the first half as customers have continued
to respond favourably to our "Simply Value For Money" proposition, backed up by
tremendous choice and good, friendly service.

"We are pleased with the customer reaction to our new stores and remain
confident that we will achieve a total of at least six new superstore openings
in this financial year, in line with the guidance given at the time of the IPO."

Dunelm will announce its interim results on 7 March 2007 (not 6 March as
previously communicated). There will be a presentation for analysts at 9.30am on
that date in the offices of UBS, 1 Finsbury Avenue, London EC2M 2PP. Those
analysts who wish to attend are requested to contact Charlie Field or Natasha
Jobling of Hogarth Partnership at the number below. A copy of the presentation
will be made available on the Company's website.

UBS Limited acts as financial adviser and joint corporate broker to the Company.
Bridgewell Limited acts as joint corporate broker.


                                    - Ends -


For further information please contact:

Dunelm Group plc                                   0116 2644 356
Will Adderley, Chief Executive
David Stead, Finance Director

Hogarth Partnership                                020 7357 9477
John Olsen / Fiona Noblet



Notes to editors

Dunelm is one of the top 10 retailers operating in the £12bn UK homewares
market. The Group has 83 stores, branded Dunelm Mill, of which 66 are
out-of-town superstores and 17 are high street shops. The majority of the stores
are located in the Midlands or north-west of England. Dunelm employs over 5,000
full and part time staff, the vast majority of whom work in the stores.

Dunelm was founded in 1979 as a market stall business, selling ready made
curtains. The first shop was opened in Leicester in 1984 and over the following
years the business developed into a successful chain of high street shops in the
Midlands specialising in soft furnishings. The first Dunelm superstore was
opened in 1991, leading to the Company's move into the broader homewares market.

The superstores provide an average of 28,000 sq ft of selling space and offer an
extensive range of up to 18,000 products across a broad spectrum of categories,
including bedding, curtains, gifts and seasonal items, cushions, bathroom
products, kitchenware, quilts, pillows and rugs. Dunelm also specialises in
offering a wide range of fabrics, made to measure curtains and a frequently
changing series of special buys. The directors are passionate about ensuring
that all ranges live up to Dunelm's philosophy of offering customers "Simply
Value for Money".

Dunelm listed on the London Stock Exchange in October 2006 (DNLM.L) and has a
current market capitalisation of over £400 million.





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