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Focus on digital pays off for Carpetright in flat market

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Carpetright today said its focus on bringing digital to the fore in its multichannel retail business had helped it to a significant boost in underlying profits in its latest financial year. Revenues, however, fell by 2.9% in flat and declining markets, while exceptional property costs pushed the company £5.1m into the red at the bottom line.

While most shoppers looking to buy the retailer’s carpets or beds visit a store, Carpetright says the internet is an increasingly “vital research tool for customers”. “The rapid growth of smartphone and tablet use also underlines the importance of having an effective and integrated digital proposition,” it said. With that in mind, it invested in developing its online presence over the year and attracting visitors through both search engine optimisation and pay-per-click. By the end of the year it was welcoming more than 87,000 unique visitors to its website each week, 21% up on the previous year. At the same time, requests for samples rose by 70%.

The update on its digital strategy came as Carpetright today reported a 2.9% fall in sales to £457.6m in the year to April 27, as the UK market remained flat and sales fell in the rest of Europe. While Carpetright reported underlying pre-tax profits up by 142.5% to £9.7m, exceptional items of £14.8m relating to the reorganization of its store estate took the company into the red at the bottom line, with statutory pre-tax losses of £5.1m.

In the UK market alone, like-for-like revenue, which strips out the effect of store openings and closures, was up by 2.2%. During the year it refurbished 154 UK stores, and said that sales in its fully modernized stores rose by more than 10%. The company has been rightsizing its store estate in the light of changing consumer behaviour, and said that it had reduced its total stores during the year to 478 in the UK. However, losses on property sales together with what it termed “onerous lease provisions” had resulted in exceptional charges of £14.8m.

Carpetrifght said European sales remained weak, especially in the Netherlands. The company is also looking to improve the compatibility of its European websites on mobile devices.

The company said that while the market remained weak, taking self-help action in areas such as store refurbishments and digital improvements had paid off.

Chief executive Darren Shapland said: “The success of our self-help activities in improving group performance during the period was particularly encouraging, demonstrating that a focus on factors within our control can yield good results.

“While we expect trading conditions to remain challenging, we are confident that the combination of these self-help initiatives will underpin the positive momentum of the group.”

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