Carpet retailer Carpetright today said cost savings and higher margins had helped keep profits in line with expectations.
Carpetright, based in Rainham, Essex, said total sales fell 0.8% and like-for-like sales eased 1.5% in the 22 weeks to 4 October.
It blamed the drop on a worse than expected performance in August and early September but said gross margins increased 2.9 percentage points against last year.
The group added in a trading update that its cost reduction programme had produced savings slightly ahead of those expected.
Chairman and chief executive Lord Harris said the group continued to improve profits compared with last year.
“Our UK business has continued to gain market share in what has been a difficult trading environment,” he said.
The carpet and floor coverings retailer employs about 3,000 staff at 351 stores in the UK and Ireland and 90 in continental Europe.
In July, it said its operations in the UK and Ireland increased pretax profits by 16.2% to a record £61m in the 53 weeks to 3 May.
The positive figures helped the group post operating profits before one-off costs and goodwill of £53.3m, slightly above analysts’ forecasts of £53.2m.
It said a focus on investment, innovation and efficiency had helped it increase market share and gross margins, despite the economic slowdown.
The company plans to open 22 stores and close six – a net increase of 16 stores – in the current year.
Carpetright bought its European business in Holland and Belgium, Carpetland, in October last year and embarked on a restructuring, which included the closure of its distribution centre and two stores.
Today, the group said the Benelux business had continued to see some improvement in the sales trend during the period for both Belgium and Holland, although market conditions continued to be challenging in both countries.
References: EGi News 07/10/03
