Carpetright king Lord Harris sees the end for wooden floors

The wooden flooring boom is over, the carpet king Lord Harris of Peckham declared today.

The Carpetright chairman said: "At the boom in 2007-8, UK sales of wooden flooring and laminates were £400 million.

"That came down to £200 million last year and will probably settle at between £100 million and
£150 million a year in the future.

"Only the upmarket end of the business will survive with the cheap stuff knocked out by the DIY sheds really suffering."

He claimed: "We believe this is a growing reflection of the growing customer appreciation of the benefits of vinyl and a trend back to carpet."

However, shares in Carpetright slumped 54p to 656p today as Harris admitted that the coming year "was going to be difficult because of rises in VAT and rising unemployment".

He said trading since the start of the calendar year had been flat, and while Harris expects a "fillip" from September to December ahead of the rise in VAT next January, he expects consumer demand to remain subdued.

Harris also predicts VAT will remain at the higher rate of 20%.

"I can't see it going back down again ever," he said. "We have to get the Government deficit down."

Pre-tax profits rose 64% to £28.2 million in the year to May 1, but that is a long way from the £62 million Carpetright made two years ago. Sales rose 7% to £517 million.

Analysts also suggested that despite the doubling in dividend to 16p a share, this was still 4p less than the company had signalled before Christmas.

Harris said Carpetright had "adapted" to take account of challenging trading conditions with no major capital spending plans in the near future.

He also said new ventures to supply carpets directly to leading UK insurers and housebuilders were showing "encouraging signs".