Floor coverings distributor Headlam has reported a decline in sales although it is making “significant progress” in the implementation of its transformation plan.
According to its latest trading update for the five months to the ended 30 November 2024, total sales were down 7.3%. This has been driven by revenue from Larger Customers, in particular resulting from Carpetright exiting the market. This helped to reduce the decline in UK revenue from 11.3% in H1 to 6.6% in the period.
“Despite this improved rate of revenue decline in recent months, the market itself has been weaker than previously projected,” the group said. “Accordingly, the Group expects the underlying loss before tax for the second half to be broadly in line with the first half.”
Headlam also shared an update on its two-year transformation plan that it previously announced back in September.
Recent developments include the consolidation of 32 trading businesses into one single, national business trading as Mercado, the fit-out of its new distribution centre in Rayleigh being almost complete and is expected to become operational in early 2025. As previously announced, these changes mean that its Ipswich distribution centre becomes surplus to requirements.
Furthermore, the optimisation of its warehouse operations in Scotland is now complete, with the consolidation of two sites into one distribution centre near Glasgow, resulting in its Uddingston site becoming surplus to requirements. Both surplus sites are in discussions to be sold.
Commenting, Chris Payne, Chief Executive Officer, said: “The challenges impacting the UK flooring market have continued to weigh on our trading performance in the short term. However, the Board remains encouraged by the significant progress we are making against our strategy and transformation plan to simplify our operations and improve our customer offering.
“In light of the additional market headwinds, we are extending this programme to target greater benefits over the next two years. This progress remains critical to ensuring the business is positioned for long-term success given the wider current macroeconomic uncertainty and its impact on consumer confidence and our markets in the near-term.”
