Carpetright’s new boss pledges store revamp will go on

Darren Shapland, who took over as chief executive from veteran boss Lord Harris seven months ago, said self-help initiatives should help underpin momentum in the UK, where sales have just returned to underlying growth.

Operating profits in the UK jumped to £5.2m in results for the 26 weeks to October 27 announced yesterday, up from £800,000 a year earlier.

However the company barely managed a profit in the Netherlands, Belgium and Ireland over the period.

When including one-off items such as property costs it recorded a bottom-line half-year loss of £7.9m.

Mr Shapland said that on the evidence of trading through the important September to November peak period the group was “well-managed and that no fundamental shift in strategy is required”.

He added: “That said, we believe there are opportunities to accelerate the pace of a number of current self-help initiatives.”

The former Sainsbury’s executive said he planned to step up the ongoing modernisation of the store estate, having so far spent around £50,000 per store on updating 92 locations to the company’s latest format.

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

The company opened five stores and closed 15 during the half-year, mainly as a result of the need to reduce overlap in towns where it has more than one outlet.

It was reported yesterday that the company plans more stores in London, where the property market is still buoyant.

However Mr Shapland warned: “We’re still planning for the next six months being tough.”

Carpetright shares were slightly up at 667.50p following the update yesterday. Panmure Gordon analyst Philip Dorgan said the company’s optimism going forward had some foundation.

He added: “There has been some improvement in the level of housing transactions and mortgage approvals, which may eventually feed through to demand. In the meantime, management is controlling costs well and squeezing suppliers.”