Carpetright invests online but plans store closures as shopping changes

Carpetright is expanding its online team and planning to close shops as more consumers turn to the internet to research purchases.

The carpets and beds retailer today said that 16% growth in the number of unique visitors to its website, which reached more than 70,000 a week in its latest financial year, boosted in turn both sample requests and appointment leads.

Thus, it said, having invested in its online presence during the year, “we are investing in a larger team, recruiting individuals with the necessary skills and experience to ensure we maximise the opportunity.” Investment in other sales channels includes a new call centre, better follow-up at store level and a programme of store refurbishments. Two smaller-format sample stores opened during the year, an area that is expected to grow in future.

Carpetright says customers are now prepared to travel further to get to a store, since they are making the trip only once for each purchase. That means, it says, that it needs fewer stores. “With growing numbers of customers prepared to travel further to make their single physical store visit to complete their purchase we believe that over time this will result in a shift in the required geographic density of our store estate,” it said as it unveiled its annual results today. The retailer closed 61 stores in its latest financial year, including 16 concessions that closed when Focus DIY went into administration. Today it said leases on 88 more stores in its 490-store portfolio were due to end in the next five years, giving it “a natural opportunity to further reshape the portfolio in a cost-effective way, reducing the size of the store footprint and lowering our ongoing rent roll.”

Total group revenues fell by 3.1% to £471.5m in the year to April 28, from £486.8m in the previous year. Pre-tax profits came in at £13.5m, up from £6.6m at the same time last year, thanks to a £14.5m boost from the sale of property. But before the effect of the exceptionals, underlying pre-tax profit was £4m in the year, down from £16.9m last time.

In the UK sales fell by 3.8% to £381.6m, but by 0.2% on a like-for-like basis. While like-for-like sales fell by 2.4% in the first half, they recovered to grow by 1.9% in the second half. Sales in the rest of Europe fell by 0.3% to £89.9m, and down by 1.2% on a like-for-like basis.

Chairman Lord Harris said: “In my statement last year I said I expected the coming year would be challenging, with an extended period of economic uncertainty and fragile consumer confidence, and this proved to be the case. As a result, the group faced difficult trading conditions leading to a reduction in sales volume, but we remain profitable and continue to generate strong operating cash flows.”