Carpetright trebles in run-up to flotation

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The Independent Online
SIR PHIL HARRIS brought his carpet shops venture, Carpetright, one step closer to its pounds 80m-plus flotation yesterday, publishing a pathfinder prospectus. This showed pre-tax profits almost trebled to pounds 7.8m in the year to 1 May, writes Patrick Hosking.

Sir Phil, who works four days a week as chairman and chief executive, is on a three-year contract paying him pounds 175,000 plus a car and other perks. The float is expected to value his 38 per cent holding at pounds 30m or more.

The flotation is to allow some of the shareholders - including Sir Phil, the furniture group MFI, NatWest Ventures and Phildrew Ventures - to realise part of their investment.

It will raise about pounds 10m to redeem their preference shares, with 35 per cent of the shares offered to the public and the rest placed with financial institutions. The full prospectus, with the float price and the number of shares to be sold, will be published on 8 June, the deadline for applications is 16 June, and dealings are due to start on 23 June.

Sir Phil sold his Harris Queensway carpet shop venture to Sir James Gulliver in July 1988 for pounds 450m, shortly before it plunged into losses. Four months later he launched Carpetright, trading from a single store in Canning Town, east London.

The business has grown to 116 edge-of-town stores, which turned over pounds 78.6m in the year to 1 May. Pre-tax profits grew by 178 per cent from pounds 2.8m in the prior year. It claims to be the biggest specialist carpet retailer, with 6 per cent UK market share.

Sir Phil promised that the company would not diversify outside carpet-selling - one of the reasons for the collapse of Harris (later Lowndes) Queensway - and would not make large acquisitions.