Carpetright rolls out the red carpet for middle classes in upmarket moveComments Off on Carpetright rolls out the red carpet for middle classes in upmarket move
The new strategy follows a tumultuous year of profit warnings, shop closures and cost-cutting. But now Carpetright — whose new boss Wilf Walsh replaced founder Lord Harris this summer — has presided over a tripling of pre-tax profit to £6.7 million in the last six months. The company’s shares shot up 12%, or 36.8p, to 350p as the City lapped up the figures.
Walsh wants Carpetright to follow the likes of Lidl and easyJet, branching out from shouting about cheapness to tempt middle-class homeowners to its stores.
“We’re not going lose our reputation for value — in the same way Lidl have widened their market but not lost it, and easyJet have done the same,” he said.
But “potential customers felt that the brand was too value focused and preferred to shop elsewhere, particularly the independent sector, which they saw as more in tune with their aspirations and lifestyle,” Carpetright said.
However, Walsh is determined to change that.
“If you compare the promotions we’re doing this year to last year’s, we’ve watered down the price message away from 60% to 70% discounts, down to 25% or a maximum of 50% discounts,” he said.
“Price is sometimes obscuring the authority of knowledge our people have on floor coverings.
“We’re going to broaden the appeal — so you come [to Carpetright] whether I want to do up my council house or you want to do your five-bedroom place in Fulham. We both want what we do to look great.
“Everyone will feel comfortable with us whatever their budget or place in the class system.”
To that end, alongside its larger stores, Carpetright is going to open new, High Street boutique-format shops that are about 10% of the size, and is relaunching its website to drive people into its outlets.
In the last six months, the rallying housing market helped sales in Carpetright UK branches open for more than a year rose by 6.5% compared to the same period the year before.
The outlook was worse in Europe, when sales slipped 3.3%, although last year’s losses were still turned into a move into the black.