Will it all go wrong for Carpetright?

Carpetright, the floor covering chain, is warning investors of a critical time ahead for its profitability.

by
Last Updated: 06 Nov 2012

In a downbeat trading update, owner Lord Harris of Peckham – who started selling carpet on a south London market stall aged 15 – says that sales during October and November could materially affect his firm’s profit prospects. It’s the latest in a string of gloomy prognostications from Harris, who has previously said that the current environment is the worst he’s seen since the 1970s oil crisis, and furthermore that he expects the next year to be even worse – the worst in his entire 50 year career no less.  

There’s no doubt that the combination of a strong Euro, high oil price and collapsing housing market is making life extremely difficult for Harris’ homewares business. The fashion for polished wooden floors can’t be helping him to shift much shag pile either.

But it’s not all bad news from the firm – Harris expects to be among the first businesses to emerge from the recession and has hinted that in the meantime, he will look at making some selective acquisitions. In other words he has his eyes open for a bargain. He is also offering a pretty good dividend to his investors, a tempting enough prospect for Microsoft founder Bill Gates to want a piece of the action. Back in May Gates became a carpetbagger, taking a £15m stake in the firm though his Cascade personal investment vehicle and although it has since lost some 20% of its value that is unlikely to worry Gates too much – his $58m fortune is enough to buy every last square yard of Carpetright 50 times over.

Whether this means that forthcoming updates for Windows Vista will include axminster, berber and cut pile screensaver options – or perhaps a new type of error message asking ‘Have you installed your underlay correctly?’ – remains to be seen.

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