The company, which has 472 stores in the UK, said it had yet to see the benefit of the economic recovery as losses increased to £7.2 million for the year to April 26, up from £5.1 million.
It was also hit by weak trading conditions in the Netherlands, where deteriorating consumer confidence left like-for-like sales at the company's rest of Europe division more than 8% lower.
Excluding one-off items such as losses on the disposal of properties, Carpetright said underlying profits were cut in half to £4.6 million.
Lord Harris, who founded the business 25 years ago and is due to step down as chairman later this year, said he expected an improved performance this year as a result of a store refresh plan.
More than half of the shops have been given a more contemporary feel, with more natural light, updated signage and better layouts.
Total UK revenues fell by 1.5% in the year to £375.8 million, while it opened 13 stores and closed 19 over the period. Underlying profits for the UK were slightly lower at £10.7 million.
Lord Harris added: "While indicators point to an overall improvement in UK economic performance over the past 12 months, it has been a challenging time for the group with our markets remaining highly competitive and deal-driven."