Carpetright’s CEO Yields to Critics over Laminates
Rainham, Essex, UK, July 2--Lord Harris of Peckham, chairman and chief executive of UK-based carpet and floor coverings retailer Carpetright, yesterday held up his hands and took the blame for the group's late launch into the ever-growing laminated floor market, according to the Money Telegraph.
He said: "Carpet sales have declined in the last couple of years by £100m and that has gone into laminates. I have always been reluctant to go into laminates because I thought it was a fashion item. It's down to me. I take the blame."
He said Carpetright had introduced laminated flooring into 60 stores, which over the last five weeks accounted for 7pc of total store turnover. By the end of August customers will be able to buy laminate floors in all 351 UK stores.
Despite this change in policy, Lord Harris remained unconvinced about the product. He said: "Laminate floors might only be a fashion. It is certainly not a repeat buy if you have young children. It is very noisy and scratchy. However, according to suppliers, [demand in] the UK market is 6pc-10pc down for carpets and 20pc up in laminates."
He was speaking as the company unveiled a 0.6 percentage point improvement in operating margin to 15pc, while pre-tax profits slipped £1.5m to £50.9m on turnover up 21pc to £436.8m for the full year.
This included exceptional costs of £5.4m from redundancy and restructuring charges incurred in continental Europe of £3m and £2.4m respectively. Carpetright has 90 stores in Europe and revealed a pre-exceptional £3.9m loss in the 10 months to the end of April.
The shares leapt 4pc or 25 to 632.5p yesterday, after like-for-like sales jumped 2.2pc in the first eight weeks, following flat sales in the second half. Total sales gained 3pc in the first eight weeks.
A final dividend of 22p is payable on September 26, taking the total up 12.1pc to 37p. This nets Lord Harris £5m from his 18pc stake.