Carpetright sales floored by crunch

The credit crunch which has caused a crisis in the housebuilding and home improvements industries has seen sales hit the floor at Carpetright.

The company, led by carpet king Lord Harris, today admitted sales in the UK and Ireland in the last three months have crashed by 15.4% on a like-for-like basis.

That means business at Carpetright has been coming to juddering halt over the summer as like-for-like sales in the year to the end of April were down by just 2.7%.

A month ago, when he reported the company's full-year results, Harris admitted he was braced for the worst 12 months trading in his 50-year career in floor coverings.

Analysts believe the sales slump could nearly halve profits this financial year. Philip Dorgan at Panmure Gordon has cut his forecasts to £33.5 million from an already bearish £46 million.
In 2007-8, Carpetright made profits of £62 million. Now, Dorgan says, "clearly the dividend is in danger".

Today Harris, who has previously attempted to take the business private, said the UK trading environment has become "more difficult". He thinks this will apply for the rest of the financial year.

"As expected," he said, "our UK and Republic of Ireland business has had a demanding first quarter, particularly by comparison to what was our strongest quarter last year [before the collapse in global debt markets] and against a background of the lowest levels of consumer confidence and mortgage approvals since records began."