Carpetright founder Lord Harris has said his first priorities are to stabilise the business and drive profits after revealing this morning (Friday) that he had returned to the helm.
Harris, who stepped back from the day-to-day running of the business last year, replaces Carpetright chief executive Darren Shapland who has exited the business. Harris will lead the business once again, as its executive chairman.
The revelation came as Carpetright issued a profit warning after poor trading in its European arm and a softer performance than expected in the UK in September.
Harris told Retail Week: “I want to get some stability over the next 12 to18 months. I want to get profits up. I will work as hard as I can to make as much money as possible.”
Shapland, former finance director of Sainsbury’s, had committed to five years in the position of chief executive when he joined last year. However, he informed the board he could no longer commit to the five year tenure, and so Carpetright sought to take steps to replace him, according to Carpetright group finance director Neil Page.
The retailer said Shapland’s departure is in no way linked to Carpetright’s poor performance. Page said the retailer will look to appoint a new chief executive within the next 18 months, allowing Harris to step back from the helm once more.
Harris said he did not know why Shapland could no longer commit to the five year tenure.
Despite the profit warning, Page insisted Carpetright did not need to change strategy. He maintained that the tough consumer environment had led to a deterioration of trading and that the retailer’s self-help measures are “very much on track”.
He said Carpetright is “absolutely” following the right strategy, which includes the modernisation of its store estate, growing it beds and digital business, improving service and extending ranges.
However, Harris said that while trading conditions are tough at present, the retail environment is still “slightly improving”.
Harris said: “The last four years were very tough. But it’s a better market now than three years ago. We’ve reached the bottom.”
Harris said the rise in mortgage approvals will help the business but that the effects will not be felt until January.
Carpetright said it had a strong August but that trading weakened in September across the market as warmer than expected weather hit footfall and consumer sentiment remained depressed. Page highlighted figures from bellwether John Lewis out this morning, showing that it too was struggling in the difficult market, with sales down 4.3% in home.
Page said: “There’s a lack of footfall on parks because people are still tight. The headline news [of green shoots] is ahead of where the consumer is.”
However he added: “There are encouraging signs. Mortgages approvals are up but only in the last few months. It won’t be until January that we see the benefit.”
Page added that The Netherlands business had been hit hard due to government austerity measures. But he added there was no plan to exit the country. “The Netherlands business is one of the market leaders, it is well positioned,” he said.
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Carpetright founder Lord Harris: 'My priority is to stabilise business and drive profits'