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Carpetright (LON:CPR) has parted company with its chief executive officer (CEO) after a slide in sales prompted a profits warning and share price tumble.
Darren Shapland, who had been with the carpet, flooring and bedding retailer for seventeen months, is being replaced by Lord Harris, Carpetright’s veteran chairman who will become a full-time executive again.
Graham Harris, the retailer’s trading director, is stepping up to be chief operating officer to work alongside Lord Harris.
Shapland’s departure follows a warning today that full year profits would fall significantly below expectation due to a soft UK market and more problems in the Netherlands.
Sales fell by 1.7% in the ten weeks to 29 September with the UK 2.5% down on a like-for-like basis and 4.1% lower overall.
European sales fell by 7.6% on a like-for-like basis and in local currencies, though this was reduced to 1.9% adjusting for currency movements.
The Dutch business will make a first half loss, Carpetright added.
Harris said: “Whilst we have improved the margin and maintained a tight control on costs, the shortfall in sales in this trading period is lowering our previous expectations."
Broker N+1 said the profits warning and departure of chief executive Darren Shapland was a total surprise. While there is a chance trading patterns could yet improve, helped by macro and self-help, it expects profits forecasts for the retailer will come back to £10mLN (10-11p earnings per share) or less. This would assume a second half like-for-like sales improvement of just 2% (rather than 4%).
The departure of CEO Shapland just 17 months into an expected five-year stint was another shock, said N+1, which had been a buyer but now has put its target price and recommendation under review.
Shares fell 10% to 604p.