Europe pulls rug from under Carpetright

The European malaise has caught up with Carpetright as disappointing sales in the previously strong Dutch and Belgian markets today forced the carpets-to-beds retailer to issue its second profits warning of the year.

Founder, chairman and chief executive Lord Harris said a slump in bed sales was also a reason. After a first warning in January, analysts cut profit forecasts to between £6 million and £8 million but the retailer with 680 shops now expects pre-tax profits for the year to the end of April to be between £3 million and £4 million.

Fourth-quarter like-for-like sales fell 4.4% in Europe but rose 1.4% in the UK.Carpetright began selling beds three years ago to diversify its business. But it has been hit by shoppers cutting back on big-ticket items for the home.

Panmure Gordon analyst Philip Dorgan said: “Carpetright’s recovery has not panned out as expected, primarily because the consumer recession has been deeper and more prolonged than expected.”

The shares today fell 23p to 582.25p. Bill Gates owns about 6% of them while a quarter of the equity is owned by Lord Harris’s family. Rival Allied Carpets has been bought in a pre-pack administration by a company owned by flooring retailer Floors-2-Go.