Carpetright has reported a 2.3% decline in UK sales for the first quarter of its financial year, but like-for-like sales were flat (down 0.2%) against a 6% decline for the full year to April 2011.


Total group sales for the 12 weeks to July 23 declined by 1.5%.

Chairman and chief executive Lord Harris of Peckham said: "As announced previously, we had expected consumer demand across Europe to remain subdued as we entered our new financial year, and this view is reflected in the update announced today.

"That said, we have seen an encouraging movement in UK like-for-like sales from the exit rate of the previous financial year, driven in part by our investment to support strong promotional activity, the growth of our bed sales and the roll out of our new laminate offer. This investment, combined with an increasing proportion of beds in the sales mix, has diluted the gross margin and we currently expect the full-year figure to be around 200 basis points lower than the prior year. We continue to implement cost management initiatives and expect our full-year UK costs to be below last year."

He added: "Looking forward, I see no respite from the challenging environment over the next year but remain confident the group will emerge in a strong position to deliver future growth once consumer demand improves."

Total sales in the company's European operations (The Netherlands, Belgium and the Republic of Ireland) also declined 2.3% in local currency, a drop of 1.7% on a like-for-like basis. However, total sales outside the UK actually rose 1.7% when converted to GBP.

The company closed 25 stores in the first quarter, which was predominantly the result of having to close its concessions in 16 Focus stores after the retailer collapsed in May.

Carpetright now operates from a total of 654 stores, with 489 standalone stores and 25 concessions in the UK.

Lord Harris said the company will continue to evolve its UK store portfolio, with customers' increased use of the internet as a research tool leading to a reduction of physical stores in some areas, counterbalanced by new stores opening in specific catchments where Carpetright is currently underrepresented.

The retailer is also set to open five more stores in The Netherlands during the year.

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