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Carpetright to close more stores to boost profits

Carpet right new format 2

Carpetright CEO Wilf Walsh has hailed a year of "significant strategic progress" after reducing the number of underperforming stores, with the retailer planning to close more shops over the next 12 months as it seeks to boost profits.

Earlier today, the company announced a small increase in annual turnover to £457.6m in the full 12 months to 29th April 2017, compared with £456.8m a year ago. Pre-tax profit fell dramatically from £12.8m last year, to only £900,000 in the last 12 months, a 93% down, although the drop in underlying profit before tax was less severe, from £18.3m to £14.4m.

By the end of the year Carpetright finished with 426 stores, having opened 8 and closed 17. It also invested heavily in its store refurbishment programme which contributed to net debt growing from £1.1m to £9.8m by the year end. Mr.Walsh described it as a "testing" 12 months but one "not lacking in excitement".

"Our strategy is on track and the positive response we have received from these initiatives has encouraged us to press ahead with plans to complete the refurbishment of the UK store estate by the end of 2018 and to extend the programme in the rest of Europe," he said.

"We have made an encouraging start to the new financial year, underpinned by the improving performance of our refurbished UK estate. While a challenging consumer environment and competitive landscape remain headwinds, we are confident the additional potential in our self-help initiatives will support an increase in market share."

In the next year, the company plans to close more stores to take its portfolio to below the 400 mark. However, it said where it closed outlets, it always attempted to redeploy existing staff locally.

Source: Insight Team

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27 June 2017

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