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January 29, 2013 5:05 pm
Solid sales of hard flooring in the UK have helped Carpetright offset steep sales declines in its European business.
The carpet and bed seller said an expanded hard floor range and a better sales performance from its revamped stores helped boost overall UK like-for-like sales by 3.2 per cent in the 13 weeks to January 26, offsetting an 11.5 per cent like-for-like sales decline in the group’s combined Dutch, Irish and Belgian businesses.
“It’s a good performance,” said Darren Shapland, Carpetright’s chief executive. “The majority of the growth is coming from things we’re doing ourselves such as modernising the stores, introducing a better hard flooring range, and also there was a significant improvement in our bed sales.”
The company said a relatively solid performance in Belgium and Ireland had been spoiled by weakness in the Netherlands where it would concentrate on “protecting profit” in what was described as a very weak consumer environment.
“The Dutch consumer is uncertain about what [government] austerity is going to mean, so they’ve slowed down spending – but we’re confident over the medium-term,” said Mr Shapland.
The company, which derives about 85 per cent of sales from the UK, said that full-year gross profits would increase by 2-2.5 per cent year on year.
Alistair Davies, an analyst at Oriel Securities, said it was a resilient performance in tough times.
“There was a bit of disappointment in the Netherlands, but overall it was a decent performance,” he said. “After a few tough years the UK business is improving through better service, pricing and using space more effectively through an extension of the product range.”
The company closed four outlets during the period to bring its total to 476 stores, of which 122 have been refurbished.
Last May Carpetright appointed Mr Shapland, a former finance director at J Sainsbury, to replace Lord Harris of Peckham, who founded the chain 24 years earlier, in a bid to reverse flagging sales following a spate of profit warnings.
The previous month Carpetright issued its seventh profit warning in 18 months as weakening consumer confidence in the eurozone took its toll.
Mr Shapland said he anticipated flat consumer demand in the year ahead but insisted consumers would have money to spare for “mid-ticket” items such as flooring.
“[Our average spend] is about £400 . . . it’s a mid-ticket item, more expensive than a pair of jeans, but it’s not a new kitchen,” he said.
Carpetright shares were down by 8p, or 1.1 per cent, to 675p in late afternoon trading.
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