Carpetright sales hit by store closures but trend improving

Carpetright said on Thursday that sales at the floor coverings retailer have been hit by store closures amid its restructuring.

In an update for the 26 weeks to 27 October, the company did not provide any figures but said that its like-for-like performance "remained negative". However, there was an improvement in the trend, as the restructuring activity began to take effect.

During the period, the company closed 67 underperforming stores - 65 in the UK and two in Europe - with a further six stores expected to close before the end of December.

Carpetright, which announced a company voluntary agreement earlier this year, said trading in the rest of Europe, i.e. the Netherlands, Belgium and the Republic of Ireland, has been slightly ahead of the same period last year.

In addition, the group said it remains confident of achieving £19m of annualised benefits announced as part of its recapitalisation in May.

Chief executive Wilf Walsh said: "This is a transitional year for Carpetright as we work through our restructuring plan. I am pleased to report that this activity is firmly on track and has started to yield benefits as we create a right-sized and well-located portfolio of stores on sustainable rents. We also continue to modernise our existing estate as well as investing in our digital capability."

Shore Capital analyst Phil Carroll said: "We see a long road ahead for Carpetright given the underlying economic conditions and the time it will take for adverse consumer perception of the brand to ease following the CVA process.

"However, from a more positive perspective, at least Carpetright is now more in charge of its own destiny given it has the capital to invest and a lower fixed cost base. For now we retain our hold recommendation."

At 1035 GMT, the shares were down 1.3% to 18.65p.