New bidders emerge in battle for Allied Carpets

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The Independent Online
THE BID battle for Allied Carpets escalated yesterday when the struggling retailer said it had received expressions of interest from other parties in addition to the existing bidders, Brown & Jackson and Wasall.

The additional interest is thought to have come from trade buyers including Rosebys, the furnishings retailer; Textile World, the northern superstore group, and possibly Harveys, the furnishings and bedding retailer. Carpetright, the rival carpet group run by Lord Harris of Peckham, would be interested in some of the Allied Carpets stores but has already received guidance from the competition authorities that a full bid would not receive clearance.

Allied Carpets' shares rose yesterday another 9p to 70.5p. The share rise came as the company promised "one of the fastest turnarounds" in UK retailing" with a plan to cut costs, refresh its brand and put the zip back into sales.

Geoff Brady, Allied Carpets' new chief executive, reported a promising trading statement which showing improving sales.

Mr Brady admitted that Allied had suffered from "outdated product ranges, lack of vision, poor marketing and a confusing price proposition". But he said sales had improved thanks to special customer evenings, giving greater autonomy to store managers and a focus on higher-value sales.

After showing sales falls of up to 13 per cent earlier this year, sales in the last eight weeks have gradually improved, with sales in the last week up by 8.2 per cent on a same-store basis.

The second phase of the review is now underway which includes "significant changes to product ranges, a further review of advertising, a centralisation of head office functions at its Orpington offices and a change in pricing policy towards `everyday low pricing'".

The group said it had net cash of pounds 5.4m as of 26 June, though this excludes rental and staff costs which fall at the beginning of July.

Mr Brady yesterday saw Meditor Capital Management, which holds a 5.5 per cent stake. Having previously regarded the company's days of independence as numbered, it was impressed by Mr Brady. "He was one of the more impressive retail chief executives we have seen recently," a spokesman said.