UPDATE 1-Dunelm set for fall in annual profits, says demand recovering

(Adds sales, costs, background)

July 15 (Reuters) - British home furnishing retailer Dunelm on Wednesday forecast a fall of as much as 21 million pounds in annual pretax profit as it counted the cost of store closures under Britain’s coronavirus lockdown while reporting signs of a revival in demand since.

The company, which sells furnishings ranging from cushions and bedding to kitchen equipment, now expects pretax profit between 105 million pounds ($132.08 million) and 110 million pounds for the year ended June 27, compared to 125.9 million pounds a year earlier.

However, it said total sales in June had risen 20% as consumers returned to its shops and that it had also seen a record 105.6% jump in online sales in its fourth quarter.

Dunelm had forecast full-year pretax profit to come in slightly above market expectations in February, on the back of higher online sales growth in the first half due to its newly revamped web shopping platform.

Social distancing measures within stores and distribution have led to extra costs for the short-term of around 150,000 pounds per week, the company said, adding that it expects technology costs to rise by around 8 million pounds in the new year due to investments in its online platform.

Total sales in April and May were down respectively 78% and 48% year-on-year.

$1 = 0.7950 pounds Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shailesh Kuber and Patrick Graham