Harris warns year ahead is 'toughest' faced in half century

Lord Harris, the chairman and chief executive of Carpetright, warned that next year would be one of the toughest in his 50-year career, although he forecast that the carpet retailer's fortunes would improve in the second half of 2009.

The comments of Lord Harris of Peckham came as the group posted pre-tax profits down 11 per cent from £67m to £59.5m for the 53 weeks ending 3 May.

Lord Harris said: "There is no doubt that the UK floor coverings market became more difficult, in line with the other housing and DIY-related sectors. The challenge has remained and I believe that next year will be one of the most difficult I have seen."

He forecast that the slowdown in sales may last for another year at Carpetright but that consumers will feel the strain for longer. "We have got six to 12 months before trading will improve. But for the rest of the country, it will be the next two to three years," he said.

He said the cost of buying carpets for Carpetright has gone up by 10 per cent since Christmas. "The downturn has been slightly quicker but that is driven by the oil price and the weakness of the pound against the euro because we do not make much [carpets] in this country," he said.

For the year to 3 May, Carpetright grew its total group sales by 9.6 per cent to £521.5m. In the UK and Ireland, the retailer increased sales by 8.3 per cent – driven principally by its acquisition of Storey Carpets in 2007 – to £452.7m, but its like-for-likes fell by 2.7 per cent.

Lord Harris said that Carpetright would consider further acquisitions if the right opportunities arose. "We are in a strong position in a weak market," he said. "We are looking at other acquisitions in Europe ... We would be very unlikely to do an acquisition in the UK because there is no one to take over."

Two days ago, Carpetright acquired Ben de Graaf, a floor covering and curtain retailer that operates 11 stores in the southern Netherlands, for €7.8m (£6.2m). At the end of 2007, the group entered a 50/50 joint venture with TTL, a German floor covering retailer, to pilot Carpetright in Germany, and the first Carpri-branded store opened in Berlin in April.

Lord Harris said that Carpetright will continue to take costs out of the business. "We try to be lean and mean." For instance, it has identified that it can downsize more than 100 stores to reduce its rent bill.

Philip Dorgan, an analyst at Panmure Gordon, said: "We expect Carpetright to outperform the market and maintain strong cashflow and good returns." However, he said that given Lord Harris's comments about next year, Panmure Gordon has adjusted its forecasts to slightly below consensus to reflect this.

Carpetright's shares closed down 40.5p at 619.5p.

Start your day with The Independent, sign up for daily news emails
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Life and Style
fashion
Arts and Entertainment
tv
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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: Oil Operations

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

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

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
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there