Carpetright will up its ad spend 15 per cent and alter its marketing strategy as sales fall in the tough big-ticket furniture sector.
The floorings retailer will plough the extra money into TV campaigns as opposed to the tabloid newspapers that it has traditionally used in
the past, although it will continue to carry some advertising in these publications.
Group commercial director Martin Harris said: “We’re focusing on TV while moving away from the Red Tops. There are only so many times you can talk to the same person.”
Harris said the campaigns will concentrate on pricing, service and noise, as “carpets are quieter than laminate”. He added that Carpetright is also negotiating TV sponsorship deals that should run, like the TV ad campaigns, from August to February.
“We want to spend money when [trade is at] its busiest,” said Harris.
Harris also revealed Carpetright will give its website a makeover before the end of the calendar year. He said: “We want to grow our presence on the web.”
UK and Ireland like-for-likes slumped 15.1 per cent in the 25 weeks to April 25, with total sales down 11.7 per cent. Group total sales decreased 6.7 per cent.
In the 12 weeks to April 25 like- for-likes plummeted 15.3 per cent in UK and Ireland.
The retailer has renegotiated terms with its principal bank, providing Carpetright with “committed funds through” to the end of July 2012.
Carpetright group finance director Neil Page would not comment on any potential acquisitions, insisting that the retailer is “focusing on our own business”.
Second half gross margin is expected to be about 100 basis points below last year, as the retailer was hit by the appreciation of the euro compared with sterling.
Page said: “We’re not seeing pick-up yet but it’s not got any worse. We’ll benefit when the house market picks up.”
Numis analyst Andrew Wade said the like-for-like decline was “disappointing” but that despite the “hiccup” believes Carpetright will be “one of the winners”.