Lord Harris of Peckham has been forced to come out of retirement to take over the helm of Carpetright after a shock profit warning and the unexpected resignation of chief executive Darren Shapland.
The company that Harris, 70, founded 25 years ago admitted profits would fail to meet expectations because of slowing sales across the business, especially at UK stores outside London and the South-East as well as in its European division. In response, shares fell more than 10% to 605p
Harris, who retired as chief executive 17 months ago, said: “I had been enjoying retirement, so it’s a surprise to be back, but I’ve still got the enthusiasm to do the job.”
Ending a holiday early to return to the UK, he said he would run the company for about 18 months while looking for a permanent successor.
Shapland is thought to be receiving a pay-off of £450,000 — a year’s salary — and to have parted on good terms.
Harris said: “I was on holiday and received a call from our non-executive directors who said Darren was no longer committed to the company for the five years he had previously said, and asked me if I would take over.”
He added that there was no falling-out between the two sides, and the resignation and profit warning were unrelated. Shapland joined from Sainsbury’s, where he had been group development director, and previously chief financial officer. He had already worked for Carpetright as finance director for three years. In the hope of turning around the company’s fortunes after the financial crisis, its stores were revamped, started selling beds and launched an improved online presence.
However, it appears that the turnaround would take too long for Shapland to see it through.
Retail analyst Nick Bubb said: “I guess Darren thought he would be able to preside over a great profit recovery before going off to do something else and it dawned on him that it would be a long haul. I suspect the greater mystery is in why he went back to Carpetright in the first place.”
Shapland could not be reached for comment.