Carpetright reaping rewards of turnaround strategy

With 122 of its 476 stores now modernised, the floor coverings retailer said like-for-like sales were 3.2 per cent higher in the UK in the 13 weeks to January 26.

This was faster than the rate of 0.7 per cent seen over the previous half-year, although Carpetright’s progress in the UK has been offset by more dismal trading in the rest of Europe, where like-for-like sales were down 11.5 per cent.

As the company enters the peak spring season for home improvements and house moves, the recently-appointed chief executive Darren Shapland said the company was on track to meet profit expectations for the year.

It made profits of just £4m in its most recent financial year, compared with £62m in 2008.

Mr Shapland took over from veteran boss Lord Harris of Peckham early last year and has stepped up “self-help initiatives” such as store refits and the roll-out of its bed business and laminate range to more stores.

By the end of the financial year in April, Carpetright expects to have 180 stores – 40 per cent of the current UK store estate – under the new look, with a more contemporary feel that is easier for customers to shop in.

Outside the UK, the company has seen continued sales weakness in the Netherlands, where it has 95 stores, against solid performances in Belgium and Ireland.

As a result, total group sales were down 1.6 per cent in the quar- ter.

Seymour Pierce analyst Kate Calvert said sales and profits were moving in the right direction, although she has kept the broker’s sell recommendation.

She added: “While UK housing market and mortgage approvals have shown some encouraging signs of improvement, it is from a very low base relative to history and far too early to call a wider recovery.

“Carpetright profits may now be moving in the right direction again but it is difficult to see any more than a pedestrian rate of recovery.”