Carpetright’s like-for-like sales have continued to tumble but it has successfully renegotiated its banking terms.
In the 25 weeks to April 25, UK and Ireland like-for-likes slumped 15.1 per cent, with total sales down 11.7 per cent. Group total sales decreased 6.7 per cent, buoyed by its European business, where like-for-likes increased 0.7 per cent and total sales in local currency jumped 6.7 per cent.
In the 12 weeks to April 25, Carpetright said trading remained “challenging”, with like-for-likes plummeting 15.3 per cent in UK and Ireland.
The retailer said it has renegotiated terms with its principal existing bankers, the Royal Bank of Scotland. The new facility provides Carpetright with “committed funds” through to the end of July 2012. Carpetright said it has £25m of existing facilities with other banks, making total available bank facilities £135m. Net debt at the year end is expected to be around £95m.
Second half gross margin is expected to be around 100 basis points below last year, as the retailer was hit by the appreciation of the euro compared to Sterling. In the UK and Ireland 15 stores were opened and 12 shut, taking the total to 564, including 60 concessions.
In the 12 week period, like-for-like sales in Europe – The Netherlands, Belgium and Poland — were down 1.4 per cent. Carpetright opened three stores in Europe and closed three in the second half, bringing the total to 128 stores.
Carpetright said it has “invested considerable effort in store layouts, ranging, home delivery and staffing” for its recently acquired Sleepright business. It said it remains “confident that it will prove to be a very good acquisition for the Group”.
Chairman and chief executive Lord Harris of Peckham said: “As expected, the UK trading environment has remained very difficult. The recent trend in mortgage approvals is improving and we would expect to begin to see this benefit in our sales later in the year.
“Our business in Europe continues to grow and increase market share.”