Carpetright in profit blow as sales tumble

CARPETRIGHT, the country’s biggest floor coverings retailer, said the outlook for 2011 looked poor as sluggish mortgage approvals meant housing market activity was unlikely to pick up quickly.

British mortgage approvals, which are a key lead indicator for Carpetright, fell to 30,766 in October, their lowest monthly level in more than one and a half years.

“The availability of mortgages, particularly for first time buyers, is significantly different from what it was three years ago (with people) needing a much higher level of deposit.

“I think that’s having a knock-on impact through the rest of the housing chain at the moment,” Carpetright finance director Neil Page said.

He was speaking after the firm posted a 28 per cent fall in first-half profit.

Page is also concerned that the country’s prolonged cold snap could hit third-quarter trade.

“If we have Arctic conditions for six to 10 weeks... I’m sure it will impact consumer demand. But it won’t just impact Carpetright, it will impact the whole of retail,” he said.

However, he added that the company, which has 584 stores in the UK and Ireland, was continuing to win market share from smaller rivals, and said he has high hopes for the firm’s fast-growing beds business, which will be in 200 stores by Christmas.