Tough conditions in the floorcoverings market have taken a heavy toll on annual profits at Carpetright and on the performance of United Carpets stores.
Carpetright today reported a slump in pre-tax profits before exceptional items of £4m for the 52 weeks to April 28 2012, from £16.9m the previous year.

In the UK, where Carpetright has 490 stores, revenue fell 3.8% to £381.6m from £396.6m in 2011, with like-for-like sales down 0.2%. However, business picked up in the second half of the year, with the company turning a first-half like-for-likes decline of 2.4% into a second-half increase of 1.9%.

Carpetright chairman Lord Harris commented: "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."

The business's new chief executive, Darren Shapland, added: "Notwithstanding the on-going challenges of the difficult consumer environment, I have been encouraged by what I have seen so far in the six weeks since becoming chief executive."

Despite what it says is "a weak and volatile floorcoverings market", the company states that it is seeing a positive impact from actions taken during the year, and that it is well placed to deliver profitable sales growth once consumer demand improves.

Tough market conditions for floorcoverings are also impacting on United Carpets. The retailer has already closed some of its franchise stores and is now conducting a review of more of them to decide whether or not they are viable. Any that threaten to become an "unsustainable financial burden on the group" will be shut down.

The company said: "Apart from occasional, short-lived, promotion-led activity, trading for retailers generally and for big-ticket retailers in particular has been extremely challenging.

"As a consequence, since the year end it has been necessary to terminate a number of franchises. This is likely to have a detrimental effect on the performance of the group as it is proving increasingly challenging in the current environment to turnaround failing stores."