Blood on the carpet as flooring giant drifts into the red

RED was the colour at Carpet-right during the first half of its financial year as uneasy consumers put big‑ticket items on hold and helped send the UK’s biggest floor coverings retailer to its biggest‑ever interim loss.

Carpetright posted a bottom-line loss of £800,000 in the 26 weeks to 29 October, a stark turnaround from a £9.8 million profit in the same period of 2010. The interim divi was axed.

The company revealed that like‑for‑like sales fell 2.4 per cent despite a range of price‑cutting promotions that also chopped 4.3 percentage points off profit margins.

However, Carpetright said it was optimistic that its performance would improve in its second half, partly due to an increase in mortgage approvals, which traditionally drive sales of home improvement products.

The group’s plunge into the red was partly due to restructuring charges linked with the closure of 36 stores. Stripping out these costs, profits fell 86 per cent to £1.4m from £10m. Analysts said it looked like trading had now passed the low point.