Carpetright hit by tough climate

Floor coverings retailer Carpetright has reported a 15.4 per cent slump in sales due to tough market conditions.

The group said it had been a demanding first quarter and warned conditions were likely to remain tough.

Carpetright operates from 559 stores in the UK and Ireland including 60 concessions and 38 Storeys outlets.

David Stoddart, an analyst at Altium Securities said: "The first quarter last year was the strongest quarter of the year. Nevertheless, this is a disturbing sales performance from a strong market leader that we would expect to outperform the wider market."

Despite the company reporting a further improvement in margins, Mr Stoddart said he expected a sharp reduction in his profit forecasts.

Lord Harris of Peckham, chairman and chief executive, said the tough first quarter in the UK reflected plunging levels of consumer confidence and the lowest mortgage approvals since records began.

He added: "The trading environment in the UK has become more difficult and we can see this continuing for the rest of our financial year.

"However, we believe that our recent operational improvements enhance our resilience to challenging market conditions and that our strong competitive position will enable the business to continue to grow market share."

Lord Harris, who launched the business from a store in Canning Town, east London in 1988, announced last year he was considering an offer for the firm.

But the potential £850 million move, which came after a period of disappointing trading for the company, was dropped in March because of difficult credit conditions.

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