25 May 2024, 11:59
By Furniture News Jun 25, 2019

Carpetright signals return to growth following CVA

Despite posting significant revenue declines, Carpetright has stated that its business turnaround process following last year's CVA is "on track, with an encouraging return to positive LFL sales growth”.

In the retailer's FY results (ended 27th April 2019), Carpetright posted a revenue decline of -17% (-9.1% LFL) for its UK business.

H1 proved particularly challenging, with LFL's down -12.7% as the group implemented the CVA and associated restructuring of its store portfolio, while its performance improved significantly in H2, with LFL sales down just -5.4%. 

The year saw Carpetright close 80 stores as part of the CVA, while 23 were retained on a nil-rent basis.

Chief executive Wilf Walsh says: “2018/19 was a transitional year for the business as we took tough but necessary action to address our legacy property issues and restructure the UK store estate. This difficult task was carried out against the backdrop of a challenging trading environment but was essential to put the business back on the path to sustainable profitability.

“From a trading standpoint it was, as expected, a year of two halves, with the first six months reflecting the impact of the CVA implementation, followed by a significant improvement in the second half and, in particular, during Q4. We are pleased to report today that this positive trend has continued into the new year with a return to LFL sales growth in the first eight weeks of the period, when UK LFL sales grew by +8.5%.

“We remain the clear number-one player in floorcoverings, having maintained our market leadership during an exceptionally challenging period, and our brand attributes remain strong," Wilf continues. "Our work is far from finished, and while economic and political uncertainties cloud the near-term outlook for the retail sector, our turnaround plan is very much on track.”

Carpetright plans to deliver £19m of annualised savings as part of the CVA, amid further investment in digital assets and a strengthened product range across all flooring categories.

In other news, non-executive director Sandra Turner is to step down from Carpetright's board on 5th September, after nearly nine years’ service, while Pauline Best has been appointed to the board as an independent non-executive director, with effect from 1st August.

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