Carpetright's new boss vowed to broaden the appeal of the floor coverings business today after admitting it was seen as too value focused.
Wilf Walsh, who recently took the helm following the departure of founder and veteran carpet retailer Lord Harris of Peckham, said one of his priorities was 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.
Shares jumped 10% today as underlying profits more than doubled to £6.7 million. Like-for-like revenues in the UK increased by 6.5% on the back of improved consumer confidence and the impact of the company's continued focus on price promotions.
Carpetright's reputation for value works well with its core customer base but Mr Walsh said this also prevented some customers from shopping with it.
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 has been managing director of bookmaker Coral, said broadening the appeal of the brand, while retaining its traditional customer base, was 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 4 million sq ft of store space, more than 2% lower year-on-year. More than half the company's stores have now been modernised.
Carpetright said trading continues to improve in its rest of Europe division, which covers Ireland, Netherlands and Belgium, with like-for-like sales now down by 3.3% in local currency terms.
Carpetright is looking to rebound from a £7.2 million bottom-line loss last year, which was dragged down by weak trading at its European operations.
The company said a review of its brand, including its "tone of voice and identity", will aim to position the business in a more contemporary market.
Its market leading promotions stimulated demand in the half year period but Mr Walsh said it was important to keep discount levels under regular review.
He is launching a trial of smaller high street stores, which will feature a sample only premium product, and has emphasised the importance of the internet for driving customers into its stores.
Mr Walsh said: "Physical stores remain crucial in the flooring market, with customers wanting a sensory experience, where they are able to touch and view the product, prior to making a purchase.
"In addition, stores represent a route to receiving specialist advice on what is a relatively infrequent purchase.
"However, the internet has become a vital research tool for many customers and the rapid growth of smartphone and tablet use has made an effective and integrated multi-channel proposition a necessity."
Greg Bromley, an analyst at retail consultancy Conlumino said the uplift in like-for-like sales suggests the retailer is moving in the right direction, even before its new business strategy has been implemented.
He added: "Wider economic improvements have led to an increase in bigger ticket purchasing such as flooring.
"However, at the same time, the market for flooring has become more competitive, with players such as John Lewis, B&Q and Homebase working to improve their offers, and newer, more nimble players such as ScS and Wilko aiming to gain a greater foothold in this market.
"Therefore, although its new growth strategy may impact margins in the short term, we believe it to be a sensible in order to protect its long term performance."
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