Allied Carpets adds to high street gloom

THERE WAS further evidence of a slowdown in consumer spending yesterday when Allied Carpets issued a profits warning sending its shares into freefall.

The warning follows weak high street sales figures for April reported by the British Retail Consortium on Monday and comes just two months after similar warnings from DFS Furniture, MFI and Carpetright.

John Lewis, the department store group, added to the bad news yesterday when it reported only a modest sales increase in the week to 9 May. It blamed the good weather last weekend which "drew customers away from shopping to other pursuits".

Allied Carpets said recent trading conditions had been difficult, particularly over Easter and the May Day bank holiday. "There seems to be a distinct lack of consumer confidence," said managing director Ray Nethercott. "We are just not getting the customers into the stores."

Allied Carpets shares plunged 34.5 per cent to 89p on the news, a fraction of their 215p issue price upon flotation two years ago. The warning dragged down shares in other retailers of higher ticket goods like MFI and Carpetright.

Mr Nethercott blamed a combination of higher interest rates and the strong pound which had affected workers in manufacturing industries.

"We are finding that the further north we go the worse it is for us," Mr Nethercott said. "If people are working less overtime they are more likely to think twice about investing a substantial sum in a carpet." Allied Carpets' average selling price is more than pounds 1,000.

Though reluctant to blame the weather he said the freak flooding over Easter had caused problems. It is understood that Allied Carpets has now stopped the expansion planned for its more mass-market Carpetland format.

Allied Carpets saw like for like sales grow by 11 per cent in January and continued to trade well in February and March. But over the crucial Easter period its sales were 10 per cent below those of last year.

It said it expected the trend to continue and that its full year profits would now be "considerably below" the pounds 16.2m achieved last year.

Brokers have downgraded their forecasts from pounds 19m to pounds 13m as a result. The company said it was maintaining the full year dividend.

Some analysts suggested Allied Carpets could now be a takeover target. However, the identity of a likely bidder is unclear. Carpetright, the main rival could expect to fall foul of the competition authorities.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
News
i100
News
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
Fernando Torres has not scored in 266 minutes of pre-season for Chelsea
football
Arts and Entertainment
(L-R) Amanda Peet as Tina Morris, Melanie Lynskey as Michelle Pierson, Abby Ryder Fortson as Sophie Pierson, Mark Duplass as Brett Pierson and Steve Zissis as Alex Pappas in Togetherness
TV First US networks like HBO shook up drama - now it's comedy's turn
Travel
Pool with a view: the mMarina Bay Sands in Singapore
travel From Haiti and Alaska to Namibia and Iceland
News
The will of Helen Beatrix Heelis, better known as Beatrix Potter, was among those to be archived
people
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect