Carpetright warns on profits as chief executive steps down
Flooring and carpet retailer Carpetright has warned that its full-year profits will be significantly below expectations as it announced that chief executive Darren Shapland is to leave the business after only 17 months at the helm.
Carpetright founder Lord Harris of Peckham said: “As a result of a combination of a softer UK market and a further step down in the Netherlands, it is likely the group's full-year profit will be significantly below our previous expectations.”
In a trading statement issued today, the company said that trading had been volatile in the UK in the ten weeks ending 29 September with like-for like sales falling by 2.5%.
In local currency terms, like-for-like sales in Netherlands, Belgium and Ireland decreased by 7.6% driven by weakness in the Dutch economy. The group reported that its Dutch business was now expected to be loss-making in the first half, although its Belgian and Irish businesses were performing in line with expectations.
Lord Harris said that excluding the expected decrease in sales from the wholesale business, Carpetright’s core retail business would have reported a like-for-like decline of 1.7%, compared to a 2.4% increase last year.
He added: “Our self-help activities continue to deliver growth, although the underlying market remains soft despite recent improvements to mortgage approvals and consumer confidence.
"Whilst we have improved the margin and maintained a tight control on costs, the shortfall in sales in this trading period is lowering our previous expectations."
In a separate statement, Carpetright announced that chief executive Darren Shapland would be stepping down from his role and that Lord Harris would lead the business as executive chairman.
The former Sainsbury’s director was hired by the business last May to help turn the business around as it struggled against tough high street conditions.
Lord Harris said: "I am disappointed that Darren Shapland, who has made a significant contribution to Carpetright over the last 17 months, is leaving the business, but he does so with our thanks and we wish him well for the future."
Meanwhile Graham Harris, who is not related to the Harris family, will move from the role of trading director to become the group’s chief operating officer.
Lord Harris added: "I am enthusiastic about tackling the challenges that the business continues to face in these difficult economic times and pleased that Graham Harris will be working alongside me as chief operating officer, having already made a strong contribution to the group since joining us earlier this year. I shall also be working with the Board to develop longer term management succession arrangements."
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