Carpetright sales drop in tough climate

Floor coverings retailer Carpetright today reported a 15.4% slump in like-for-like sales in UK and Ireland in the 13 weeks to August 2.

The group said it had been a demanding first quarter and warned conditions were likely to remain tough, but it added that it expects to grow market share due to recent operational improvements.

Carpetright operates from 559 stores in the UK and Ireland, including 60 concessions and 38 Storeys outlets.

David Stoddart, an analyst at Altium Securities, said the figures for the UK and Ireland were much worse than expected.

He said in a note: “The first quarter last year was the strongest quarter of the year. Nevertheless, this is a disturbing sales performance from a strong market leader that we would expect to outperform the wider market.”

Despite the company reporting a further improvement in margins, Mr Stoddart said he expected a sharp reduction in his profit forecasts.

In today’s trading update, Carpetright said its rest of Europe business, based on the Netherlands, Belgium and Poland, continued to make solid progress, with sales in local currency improving by 8.2%.

Carpetright announced last year that it was considering an offer for the firm, but the potential £850m (€1bn) move, which came after a period of disappointing trading for the company, was dropped in March because of difficult credit conditions. He is also a substantial shareholder in the business.