Carpetright has revealed to Retail Week that it will only take on new stores from landlords that offer monthly rents.
The retailer has already agreed monthly deals with 20 per cent of its existing landlords. Chairman and chief executive Lord Harris said he is aiming for 100 per cent sign-up âas soon as possibleâ.
Carpetrightâs stance is unconnected to its full-year profit warning issued after a dismal first half, but reflects the conviction that the present quarterly rent system is outmoded. âItâs what should be happening anyway,â said Harris.
The retailer recorded a 67.6 per cent fall in underlying interim pre-tax profit toÂŁ8.8 million in the first half. Like-for-likes fell 13 per cent in the UK and Ireland, and total sales declined 11.1 per cent.
Trading during November was âbelow expectationsâ and is unlikely to improve for at least 18 months and full-year profits will be âsignificantly below current consensusâ, the retailer said.
Despite the interim performance, Carpetright buying and marketing director Martin Harris said there are no job cuts planned and envisaged âconsiderable opportunitiesâ for acquisitions as weaker furniture retailers fail during the downturn.
Carpetright is cutting back funding of the Fun on the Floor marketing campaign next year after what Martin Harris described as a âpretty dreadfulâÂŁ700,000 billboard campaign this year.
He wanted the posters to promote âcolour and affordabilityâ but instead they featured âinsipidâ and expensive carpets. âItâs the biggest waste of money Iâve ever spentâ, he said.
Lord Harris was relaxed about Carpetrightâs long-term prospects. He said: âCarpetright has a strong brand and we are confident in our ability to compete.â
Tight control over costs, capital expenditure, stock and cash flow will help Carpetright to ride the recession, he said.
But Panmure Gordon analyst Philip Dorgan said: âWhile banks have raised no issues yet, they have plenty of time to do so.â
KBC Peel Hunt analyst John Stevenson believes Carpetright can continue to increase its 30 per cent market share. âCurrent trading across the industry is materially worse than that reported by Carpetrightâ, he said.
Carpetrightâs stance is unconnected to its full-year profit warning issued after a dismal first half, but reflects the conviction that the present quarterly rent system is outmoded. âItâs what should be happening anyway,â said Harris.
The retailer recorded a 67.6 per cent fall in underlying interim pre-tax profit toÂŁ8.8 million in the first half. Like-for-likes fell 13 per cent in the UK and Ireland, and total sales declined 11.1 per cent.
Trading during November was âbelow expectationsâ and is unlikely to improve for at least 18 months and full-year profits will be âsignificantly below current consensusâ, the retailer said.
Despite the interim performance, Carpetright buying and marketing director Martin Harris said there are no job cuts planned and envisaged âconsiderable opportunitiesâ for acquisitions as weaker furniture retailers fail during the downturn.
Carpetright is cutting back funding of the Fun on the Floor marketing campaign next year after what Martin Harris described as a âpretty dreadfulâÂŁ700,000 billboard campaign this year.
He wanted the posters to promote âcolour and affordabilityâ but instead they featured âinsipidâ and expensive carpets. âItâs the biggest waste of money Iâve ever spentâ, he said.
Lord Harris was relaxed about Carpetrightâs long-term prospects. He said: âCarpetright has a strong brand and we are confident in our ability to compete.â
Tight control over costs, capital expenditure, stock and cash flow will help Carpetright to ride the recession, he said.
But Panmure Gordon analyst Philip Dorgan said: âWhile banks have raised no issues yet, they have plenty of time to do so.â
KBC Peel Hunt analyst John Stevenson believes Carpetright can continue to increase its 30 per cent market share. âCurrent trading across the industry is materially worse than that reported by Carpetrightâ, he said.
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