Carpetright profits down by 70%

Carpetright has reported a 70% slide in full-year profits and warned it will close more stores in an effort to weather the consumer downturn.

The floor coverings specialist said profits reduced to £6.6m (€7.37m) in the year to April 30 after householders were put off making major purchases and also found it harder to obtain mortgages in order to move home. Sales in the UK and Ireland fell nearly 5% to £404.5m (€451.8m) in the year.

The group finished the period with 559 stores in the UK and Ireland, after closing a net figure of 27, and said that, with leases on 94 stores due to expire in the next five years, it expected to further reduce the size of its estate.

Lord Harris, Carpetright’s chairman and chief executive and a veteran of the retail sector with more than 50 years’ experience, described trading conditions as “very challenging”.

He axed the company’s dividend to shareholders and added: “Looking forward, I see no respite from the challenging environment over the next year.”

The company said the review of its store estate would reflect the trend for consumers to conduct research online before making their purchase.

It added: “The upshot of this change is that customers appear to be prepared to travel further to make a single physical store visit to complete their purchase.

“We believe that this trend is resulting in a fundamental shift in the required geographical density of our UK store estate.”