Carpetright has reported an £800,000 profit loss in the first half of its financial year, as it continues to navigate a "very challenging trading environment".
The company saw revenues decline by 3.9% to £238m. Underlying profit before tax dropped from £10m for the same period last year to just £1.4m, and exceptional charges of £2.2m resulted in a £0.8m loss for the struggling retailer.

In the UK, total revenues fell 5.6% to £192m, with like-for-like sales down 2.4%. Gross margin reduced by 430 basis points to 58%, reflecting higher levels of promotional costs and an increasing proportion of beds in the sales mix - a business which operates on a lower gross margin than floor coverings.

Underlying UK operating profit fell by a massive 93% to just £800,000.

Chairman and chief executive Lord Harris of Peckham commented: "Like many other retailers we are continuing to experience a very challenging trading environment, with significant sales volatility and a corresponding decrease in the gross margin. Against this backdrop, the group has remained profitable on an underlying basis and continues to generate net cash.

"With the consumer environment expected to remain difficult, we are focusing on those opportunities that are under our direct control. We have reduced out total cost base in the first half and will continue to take a determined approach to reducing this further."

The group has five strategies to deliver long-term, sustainable growth, which include a primary focus on floor coverings, developing a competitive bed proposition, managing the UK store portfolio, developing its European proposition and reaching more customers through additional channels, such as online.

Carpetright has expanded its bed business with the roll out of its 'Sleepright by Carpetright' offer in 261 locations (at end of October). The roll out of a new laminate offering has also continued and should be in around 200 stores by the end of the company's financial year.

Lord Harris added: "We are confident that the combination of these factors will underpin an improved trading performance for the group in the second half and our expectations for the year as a whole are unchanged."

The company has also reduced management staff numbers in the UK and consolidated its offices in Europe at a cost of £2.1m.