The carpet specialist this week revealed a 7.6 per cent increase in underlying pre-tax profit to£62.1 million, but a 2.7 per cent dip in UK and Ireland like-for-like sales.
Carpetright chairman and chief executive Lord Harris of Peckham forecast the market would get tougher and explained that more cost-cutting initiatives were essential to ride the storm.
“It’s a very difficult market out there and it won’t get any easier,” Lord Harris told Retail Week. “At the moment, 50 per cent of our stores are located in bulky-goods parks. We aim to increase this to 90 per cent, while reducing our floor space [for each store] from 10,000 sq ft to 7,500 sq ft over the coming years.”
The move to bulky parks will be welcomed by landlords desperate to fill the vacancies that have been left by furniture retailers going bust and the lack of new retailers taking stores.
“We’ve been in a slowdown for two years and we’ll have another slow year to come, but there are opportunities too, such as cheaper property,” said Lord Harris. “We can build good foundations from the downturn.”
Carpetright is also gearing up for the launch of its ad campaign, “Have fun on the floor”, which will cover one in 10 poster boards around the UK from September. Designed with rival carpet retailer Headlam Group, it aims to encourage consumers to invest in carpets, as opposed to alternative flooring.
In Europe, Carpetright’s revenue jumped 19 per cent from£57.8 million to£68.8 million. It has opened a pilot store in Germany and is searching for a further two properties there.