CARPETRIGHT has outlined plans to broaden the brand’s appeal to attract customers who see it as too down market.
New chief executive Wilf Walsh said he plans to address a number of negative perceptions around the brand.
His comments came as Carpetright posted stronger than expected half-year results, with annual profits now set to be near the top end of forecasts.
Like-for-like revenues in the UK increased by 6.5 per cent on the back of improved consumer confidence and the impact of the company’s continued focus on price promotions.
The group, which had made a string of recent profit warnings due to tough trading in the Netherlands and weak demand in the UK, said on Monday underlying pre-tax profit had more than doubled to £6.7m in the six months to October 25.
The firm said current market expectations for the year to May 2 range from £8m to £11m.
Mr Walsh said Carpetright’s reputation for value works well with its core customer base, but this also deters some customers.
He said his initial assessment found a “fundamentally sound business”, but one that requires some updating and repositioning to capitalise on its market leadership position.
Mr Walsh, who was managing director of bookmaker Coral, said broadening the appeal of the brand, while retaining its traditional customer base, is at the heart of his plans for the business.
The UK store estate reduced by a net figure of nine during the period to 463, trading from four million sq ft of store space, more than two per cent lower year-on-year. More than half the company’s stores have now been modernised.
Analyst John Stevenson at Peel Hunt said: “Fundamentally, the Carpetright store environment has become tired and over-reliant on blanket discounting. Having already started to address the price proposition, new CEO Wilf Walsh has a number of strategic priorities.
“Work will be focused on revitalising the Carpetright brand and widening its appeal. Management has already started to work on a range review, while a new customer service programme will commence in January.”