Lord Harris must be licking his lips. The carpet king has long dominated the sector but the collapse of his nearest rival Allied Carpets is set to consolidate his control of the UK’s floorings market. 

The floorings sector has taken a hammering in the recession and Carpetright, along with rivals such as Allied Carpets, have had to become even more promotionally driven to maintain sales.

Allied Carpets’ collapse will spell a new era for the carpets industry and while it has emerged from the ashes, it is a much smaller beast and cannot realistically be expected to be a significant player. Lord Harris has all but finished off Allied and his biggest competitor is likely to be the mass of independents in the sector.

The market hasn’t been easy for anyone, but Carpetright has the scale to deal with whatever the recession throws at it. Encouraging signs in the housing market in June, plus the cost efficiencies the retailer has achieved over the past year, mean Lord Harris should sound quite upbeat when he updates next week.

House moves are vital to the health of the sector and if the housing market continues to gently tick back up, Carpetright will be in pole position. But Allied Carpets’ demise is also likely to strengthen Carpetright’s hand beyond the residential market, where it is working hard behind the scenes to broaden its business with housebuilders and insurance companies.

With its enormous new distribution centre now up and running for over a year, the retailer has the capacity to drive volumes quickly at no extra cost, as it already has with the acquisition of Storeys and some former Woolworths and Allied Carpets stores.

Despite a 72 per cent fall in underlying full-year profits, Carpetright’s shares are up two thirds since the start of the year. Investors will be looking for signs in next week’s first-quarter update that the market will be improving. But whatever the update shows, little is likely to dent their confidence in a business that is becoming the ultimate category killer.