Blood on the carpet
As Carpetright fights for survival, tycoon Lord Harris floors its boss with a bold bid to snap up 100 stores
IT’S daggers drawn over the Axminsters as a bitter battle has erupted over one of Britain’s best known carpet chains – pitting business luminaries and peers of the realm against one another.
Flooring tycoon Lord Harris of Peckham, known as the Carpet King, has launched an audacious swoop on Carpetright – the chain he founded 30 years ago – trying to buy almost 100 of its stores.
If he succeeds in snapping up the shops from his now struggling creation, that would double the size of his new company, Tapi, which also sells carpets. It is the latest twist in a simmering feud between Carpetright’s board, led by chief executive Wilf Walsh on one side, and Lord Harris, his family and powerful backers on the other.
Harris’s bold move comes as Carpetright, which has 400 stores, fights for survival.
The directors are considering a restructuring plan that could include plunging the chain into a form of insolvency to shed unprofitable stores. Harris and his son Martin want to acquire a chunk of Carpetright stores to beef up Tapi. Retail sources suggest they have offered around £25 million, almost as much as Carpetright is worth itself today after news of its troubles seeped out.
However, sources told The Mail on Sunday that neither Carpetright nor their adviser Deloitte had so far responded to the approach despite the company’s dire straits.
Harris set up Carpetright in 1988 but left four years ago and sold all his shares. His new firm Tapi has almost 100 stores and is run by his son Martin.
Tapi is backed by a host of retail heavyweights including Harris’s friend Lord Kirkham, the founder of DFS; textiles chief Sir Harry Djanogly; former Cadbury Schweppes director Baroness Wilcox; and David Herro, a New York fund manager with a string of British high street investments.
Carpetright chief Walsh complained in December about ‘intensified competition’ and some observers claim the rivalry between Carpetright and Tapi has escalated into a vendetta.
Harris, who declined to comment on any approach for the stores, said last night he ‘made no secret’ of his son’s plan to set up a new chain and take Carpetright staff with him.
‘ Wilf Walsh’s exact words were: “Anyone that wants to leave the business can go – I will not try to stop them.” Now he’s complaining that over 400 have joined us. They’re motivated and excited about joining us and they can’t see any future in Carpetright.
‘There is a market for two of us. But I’m not going to stand there and hear that it [Carpetright’s financial woes] was us and all our fault.’
But a Carpetright spokesman said: ‘We absolutely refute this version of events. To suggest that we would somehow bless the foundation of a direct competitor by the Harris family is both wholly untrue and desperate.
‘ As is the notion that we would entertain offers for our stores from a competing business whose most recent accounts showed that it lost £10 million on £30 million turnover.’
The spokesman added that Carpetright is continuing to evaluate a voluntary arrangement ‘to address the legacy of onerous leases signed almost exclusively under the previous leadership.’