Carpetright UK like-for-likes edged up 3.2% in its third quarter to January 26 but plunged 11.5% in the rest of Europe as sales at its Dutch business remained weak.
In the UK, the retailer would have experienced a 4.7% like-for-like increase if its wholesale sales, which contracted during the period, were excluded.
Total UK sales increased 1.6% over the period. Carpetright chief executive Darren Shapland said its sales growth was down to “self-help” initiatives, such as the development of its bed business, introduction of laminate ranges to more shops and ongoing store refurbishment programme.
Shapland said: “We’ve got some good momentum in the UK business that has come through strongly in the third quarter. We’re growing market share.”
However total sales in its Netherlands, Belgium and Republic of Ireland businesses plummeted 11.2% due to the “very weak consumer environment” in The Netherlands. The flooring specialist is focused on protecting its profit in the country.
“Europe is only 15% of total sales,” said Shapland. “Belgium and the Republic of Ireland were solid performances. The Netherlands was really tough, the market is mid-teens down, but we’re trading a bit better than that. It’s macro driven. Until we get more clarity regarding the austerity measures it will continue to be.”
But he insisted it was a market worth being in for the long term. “We’ve got a good business there, a market leading business,” he said.
He added that as UK consumers increasingly shop around, Carpetright and its low price strategy was benefitting.
Carpetright also benefitted from advertising its bed proposition “quite aggressively” in the quarter. “It seems to be working,” said Shapland. “It’s about improving awareness.” Sales in the category were up 20% in the quarter.
Shapland declined to comment on reports last week that Carpetright is eyeing rival Dreams stores. The beds retailer was put up for sale last month.
However, he did say he does not expect Carpetright’s store estate to “change dramatically”. The retailer has shuttered “20-25 stores in the last year or so”, said Shapland.
It now has 476 stores in the UK.
Shapland added: “The group result for the year to date is in line with management’s expectations and while trading conditions remain challenging, we have good momentum in our self-help initiatives. That said, as ever, our performance in the final quarter will be critical to the outcome for the year as a whole.
“The last two quarters have stabilised. There are early signs of life in mortgage approvals but it’s very very small. We’re expecting this to be a pretty flat market. We can’t see anything at the moment that tells us things are going to get any easier.”
Carpetright said its full-year gross profit improvement is set to improve in the range of 200 to 250 basis points, in line with previous guidance.