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Carpetright says multichannel strategy on track, despite hit to profits

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Carpetright today said its strategy was on track after a year of “significant operational change and investment” designed to retool the carpets-to-beds specialist for a multichannel shopping environment.

The carpets-to-beds specialist, a Top250 retailer in IRUK Top500 research, reported revenues of £457.6m in the year to April 29. That’s up by 0.2% compared to the previous year. But sales in the UK alone fell by 2.6% to £381m. Pre-tax profits, before one-off costs, came in at £14.4m, 21.3% down on last time. But after one-off costs of £13.5m, relating to the rationalisation of the store estate, bottom-line pre-tax profits came in at £0.9m, 93% down on the £12.8m reported last time.

Chief executive Wilf Walsh said: “I am pleased to report on a year of significant strategic progress, as we implemented a wide-ranging programme of investment and operational change, to refresh and update the Carpetright brand. 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.

“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.”

We took a look through the statement to find the multichannel highlights.

How multichannel fits within the strategy

Carpetright is going into the third year of a transformation project that aims to focus on making selling both easy and convenient through multichannel services, as well as focusing on the stores, the brand and the product.

Online in the context of stores

Over the last year Carpetright saw a 13.4% rise in sales where the customer journey started online. Sample and appointment requests rose by 20%. Website visits grew by 14% over the year, while online-only sales rose by 74%. “Website revenue is now the equivalent of a top turnover store,” the retailer said.

Carpetright says that both customer needs and technology changes are driving the need for a “fully integrated omnichannel shopping experience”. In today’s statement it said: “We plan to invest in technology that enables our customers to interact with us throughout their buying journey on any device or physical outlet; uses information to make decisions easy for the customer; delivers a simple environment for our colleagues with the right tools; and establishes robust data security and controls.”

In the last year it introduced the Carpetright online visualiser to show how different carpets would look in specific rooms, while the website also features how to videos and a guide with brand ambassador Lucy Alexander.

In 2016, it upgraded store hardware and networks in the UK, now being extended to the Netherlands and Belgium. An integrated customer relationship management system is set to go live in the UK within the next twelve months.

Stores in the context of online

Carpetright has been rebalancing its store estate as it looks to meet the needs of consumers who often research but visit a store at some point in their purchase. It aims to reduce overall store numbers but to improve the quality of those that remain. During the year it cut the total number of UK stores by nine to 426, reducing space by 1.9%, and putting an emphasis on redeploying staff locally. It now aims to reduce the total number of stores to under 400 in the current financial year.

At the same time, Carpetiright is refurbishing its UK stores and said that by the end of the year 47% were trading under its new look. This is a particular priority, it said, in areas where it has seen increased competition from a new entrant to the market.

In its European markets of the Netherlands and Belgium, Carpetright has refurbished nine stores and plans to finish a further 12 by the end of next month.

The customer

The retailer is setting out to measure satisfaction more closely as it focuses on improving customer service. A new Fuse training and communications tools operates for a single multichannel platform that brings together online, mobile and social for training and internal communications. It will be part of the new Carpetright Managers’ Academy, to be launched later this year.

Carpetright plans to ensure customers receive consistent service. “Highly satisfied customers,” it says, “spend 3.4 times more on average and are significantly more likely to recommend.”

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