Stabilisation Notice

Dunelm Group Ltd
19 October 2006


19 October 2006

Stabilisation Notice: Dunelm Group plc

In connection with the offer of the following ordinary shares (the 'Offer'):

Dunelm Group plc ordinary shares of nominal value 1 pence each the ('Ordinary
Shares')

ISIN Code: GB00B1CKQ739

UBS Limited as stabilisation manager, or any other person acting for it, may
conduct stabilising activities with a view to supporting the market price of the
Ordinary Shares at a level higher than that which might otherwise prevail from
8:00a.m. on 19 October 2006 to 17 November 2006. However, there may be no
obligation on UBS Limited, or any agent of UBS Limited, to do this. Such
stabilisation transactions may be effected on the London Stock Exchange and any
other securities market, over the counter market, stock exchange or otherwise.
Such stabilisation transactions, if commenced, may be discontinued at any time
and must be brought to an end no later than 17 November 2006. There are no
associated instruments that are subject to stabilisation.

In connection with its stabilising activities Jean Adderley has granted UBS
Limited an over-allotment option (the 'Over-allotment Option'), exercisable on
or before 17 November 2006 which, if exercised will require her to sell up to 10
per cent. of the aggregate number of Ordinary Shares available in the Offer
(before any exercise of the Over-allotment Option) at the Offer Price to meet
over-allocations (if any) in connection with the Offer and/or to cover short
positions arising from sales of Ordinary Shares effected by it during the
stabilising period.

UBS Limited has agreed with Dunelm Group plc that any over-allotment of Ordinary
Shares by it or any of its agents will be up to a maximum of 15 per cent. of the
total number of Ordinary Shares comprised in the Offer (before any exercise of
the Over-allotment Option).

Number of Ordinary Shares in the Offer: 60,300,000

Number of Ordinary Shares subject to the Over-allotment Option: 6,030,000

The Offer Price of Dunelm Group plc Ordinary Shares of nominal value 1 pence
each was set at 170 pence on 19 October 2006.

UBS Limited contacts:

Adam Welham [phone]

This announcement may not be distributed, directly or indirectly, in or into the
United States, Canada, Australia or Japan.

This announcement is for information purposes only and does not constitute an
invitation or offer to underwrite, subscribe for or otherwise acquire or dispose
of any securities of Dunelm Group plc in any jurisdiction.

In addition, if and to the extent that this announcement is communicated in, or
the offer of the securities to which it relates is made in, any EEA Member State
that has implemented Directive 2003/71/EC (together with any applicable
implementing measures in any Member State, the 'Prospectus Directive') before
the publication of a prospectus in relation to the securities which has been
approved by the competent authority in that Member State in accordance with the
Prospectus Directive (or which has been approved by a competent authority in
another Member State and notified to the competent authority in that Member
State in accordance with the Prospectus Directive), this announcement and the
Offer are only addressed to and directed at persons in that Member State who are
qualified investors within the meaning of the Prospectus Directive (or who are
other persons to whom the offer may lawfully be addressed) and must not be acted
on or relied on by other persons in that Member State.

The Offer and the distribution of this announcement and other information in
connection with the Offer in certain jurisdictions may be restricted by law and
persons into whose possession any document or other information referred to
herein comes should inform themselves about and observe any such restriction.
Any failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.


This announcement is not an offer of securities for sale into the United States.
The securities have not been, and will not be, registered under the U.S.
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an exemption from registration. There will be no public
offer of securities in the United States.


Defined terms used in this announcement have the same meaning as in the
Company's Prospectus dated 19 October 2006 unless the context requires
otherwise.


END



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