Initial Public Offering

Dunelm Group Ltd
19 October 2006


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN, OR INTO, THE UNITED STATES,
CANADA, AUSTRALIA OR JAPAN


This announcement constitutes an advertisement within the meaning of the
Prospectus Rules of the Financial Services Authority and is not a prospectus. It
has been prepared solely in connection with Admission (as defined below) and the
proposed offer to certain institutional and professional investors outside of
the United States of the ordinary shares referred to in this announcement (the
''Offer''). Investors should not purchase such ordinary shares except on the
basis of the information contained in the prospectus expected to be published by
the Company (as defined below) later today (and any supplement or amendment
thereto) in connection with the Offer and Admission. Once published, copies of
the prospectus can be obtained from the Company at Fosse Way, Syston, Leicester,
Leicestershire LE7 1NR.



19 October 2006


          DUNELM ANNOUNCES OFFER PRICE OF 170 PENCE PER ORDINARY SHARE


Dunelm Group plc ('the Company' and, together with its subsidiaries, 'Dunelm' or
'the Group'), the fast-growing out-of-town homewares retailer, announces the
successful pricing of its initial public offering of ordinary shares (the 'IPO'
or the 'Offer').

Highlights

   • The offer price has been set at 170 pence per ordinary share (the 'Offer
     Price')

   • Based upon the Offer Price, the market capitalisation of the Company at
     the commencement of conditional dealings will be £340m

   • Conditional dealings are expected to commence on the London Stock
     Exchange at 8am today (19 October) under the ticker symbol DNLM. A
     prospectus is expected to be published later today

   • The IPO consists of 60.3 million Dunelm ordinary shares (prior to any
     exercise of the over-allotment option), representing 30.2 per cent. of
     Company's issued share capital, which have been placed with a broad base of
     institutional and professional investors. The remainder of the Company's
     issued share capital is retained by the Adderley family

   • As stabilising manager, UBS has been granted an over-allotment option of
     up to a maximum of approximately 6.0 million Dunelm ordinary shares,
     representing 10 per cent. of the ordinary shares in the IPO exercisable for
     a period of 30 days from today

   • It is expected that admission of Dunelm's ordinary shares to the
     Official List of the Financial Services Authority will become effective and
     unconditional dealings on the London Stock Exchange will commence at 8am on
     24 October 2006

UBS Investment Bank is acting as Global Co-Ordinator, Bookrunner and Sponsor in
relation to the IPO; Bridgewell Limited is acting as Co-Lead Manager.

Commenting, Will Adderley, Chief Executive of Dunelm, said:

'We are delighted with the positive response we have had from investors to the
business and the success of the IPO process. Dunelm has been rapidly growing,
and the IPO will significantly raise the Company's profile and will help support
the business in the next stage of its growth.

'We are committed to the further roll-out of our successful superstore format
and believe we have the systems, team and culture in place to enable us to
achieve this. Above all we will continue to provide our customers with great
ranges of homeware products, and will stay true to our aim of offering 'Simply
Value for Money'.

'We welcome our new shareholders to the Company and look forward to updating
them on our continued success.'

For further information please contact:

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

UBS Investment Bank                                                020 7567 8000
Adrian Haxby/Craig Calvert

Hogarth Partnership (for Dunelm)                                   020 7357 9477
James Longfield/ Fiona Noblet


IMPORTANT INFORMATION

The contents of this announcement, which has been prepared and issued by the
Company and is the sole responsibility of the Company, have been approved solely
for the purposes of section 21(2)(b) of the Financial Services and Markets Act
2000 by UBS Limited ('UBS' or 'UBS Investment Bank') of 1 Finsbury Avenue,
London EC2M 2PP.

UBS and Bridgewell Limited are acting for the Company and no one else in
connection with the Offer and will not be responsible to anyone other than the
Company for providing the protections afforded to their respective clients or
for providing advice in relation to the Offer, the contents of this announcement
or any transaction or arrangement referred to herein.

No offer or invitation to acquire shares in the Company is being made by or in
connection with this announcement. Any such offer will be made solely by means
of a prospectus expected to be published by the Company later today (and any
supplement or amendment thereto) and any acquisition of securities should be
made on the basis of the information contained in such prospectus.

This announcement does not constitute a recommendation concerning the Offer. The
value of shares can go down as well as up. Past performance is not a guide to
future performance. Potential investors should consult a professional adviser as
to the suitability of the Offer for the individual concerned.

This announcement may not be distributed, directly or indirectly, in or into the
United States, Canada, Australia or Japan. This announcement does not constitute
an offer to sell, or the solicitation of an offer to buy, exchange or transfer
any securities of the Company in any jurisdiction in which such offer or
solicitation is unlawful. The Company's securities have not been and will not be
registered under the United States Securities Act of 1933, as amended, or under
the applicable securities laws or regulations of any state in the United States,
or under applicable securities laws of Australia, Canada or Japan. Accordingly,
unless an exemption under any applicable law is available, the Company's
securities may not be sold, directly or indirectly, in the United States, Canada
, Australia or Japan or any other country outside the United Kingdom where such
distribution may otherwise be a breach of any law or regulatory requirement. The
Company's securities are subject to transfer and selling restrictions and,
subject to certain exceptions, may not be offered or sold within the United
States. There is no intention to register any portion of the Offer in the United
States or to conduct a public offering of the securities referred to herein in
the United States.

This announcement contains certain forward-looking statements. Such
forward-looking statements involve known and unknown risks and uncertainties,
many of which are beyond the Company's control, all of which are based on the
Company's current belief and expectation about future events that could
significantly affect expected results. Many factors could cause actual results
to differ materially from those projected or implied in any forward-looking
statements. Due to such uncertainties and risks, readers are cautioned not to
place undue reliance on such forward-looking statements, which speak only as of
the date hereof. The Company disclaims any obligation to update any
forward-looking statements contained herein, except as required pursuant to
applicable law, the Prospectus Rules, the Listing Rules or the Disclosure Rules
of the Financial Services Authority.

Information in this announcement or any of the documents relating to the Offer
cannot be relied upon as a guide to future performance.






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