Carpetright eyes beds market share after Dreams contraction

The floorings giant has been building its Sleepright beds business in the last two years, helping to offset weakness in the carpets market.

Carpetright chief executive Darren Shapland told Retail Week that while the clearance Sales at the Dreams’ stores earmarked for closure have been having an “impact” on Carpetright’s beds business, there was now an opportunity to build share in the long term.

“Dreams is going through a restructuring and they’ll be a stronger business in the long term,” said Shapland. “But it gives us a chance to redouble our efforts and step on again.”

Dreams was last month bought in a prepack administration deal by Sun European, which acquired 171 stores. The remaining 93 are closing down.

Shapland said the closure of almost 100 stores “shouldn’t do us any harm”.

At the end of October ‘Sleepright by Carpetright’ was trading from 276 locations and represented 6.6% of total UK sales revenue.

Carpetright reported a 5.6% rise in UK retail like-for-likes in its fourth quarter as “self-help” initiatives paid off.

Shapland said the growing beds business, store refurbishments, an improved laminate range and increased investment in marketing, particularly digital, helped boost performance.

“What you’re seeing is a combination of self-help,” said Shapland. “We spent more money on marketing, we’re very sharp on price. We promoted heavily around month end and pay days as well as Easter and bank holidays.”

Shapland added that the cold weather in April also helped.  “We had a tailwind around the weather. Home retailers based inside fared better than home retailers based outside,” he said. “We’ve got some good momentum and have more in the tank.”

However, he cautioned that he was not calling an upside to the market. “Our suppliers are telling us the market is at best flat. I don’t think we’re calling any turn in the market now. We don’t see the consumer environment changing much in the year.”

Shapland said that the Government’s action to get the housing market moving again would be good for business, but that the impact would not be felt for some time. “It’s a step in the right direction,” he said.

Like-for-likes slumped 10.2% across its European arm, pulled down by challenging conditions in the Netherlands. However, Shapland said the retailer was working hard to protect sales, by improving sourcing, its promotional programme, and staffing.

“It will be tough for a period of time but we’re taking market share. We’re investing in a structured way,” he said.