Carpetright take-private plan will likely be rolled out again

While this will provide the opportunity for Carpetright (as the scale operator in the industry) to benefit from further increasing its market share this does not in any way insulate it from the consumer downturn that is hitting homewares retailers especially hard.

 

Evidence of just how tough it is out there could be seen from the four per cent like-for-like sale decline Carpetright experienced in the UK and Ireland - for the 13 weeks to January 26 - with Lard Harris singling out the first 10 days of 2008 as especially rough going.

This has not helped the Carpetright share price that currently stands at 765.5p, which is some way off the £12.50 a share that Lord Harris was willing to pay to buy-out existing shareholders and take the group private at the back end of last year. Not surprisingly the banks found it impossible to support such a deal and it was pulled. However, despite the hassle of still being in public ownership Lord Harris is intent on pushing through with his succession plan that involves his son taking over the chief executive's reins early next year.

With the market capitalisation of the company falling so significantly and trading (along with the credit markets) unlikely to pick-up again for some time who's betting that Lord Harris will trade through the worst of the current downturn and then come back with another bid (at a significantly lower level) when there is the first chink of light at the end of the current-trading tunnel.