Page last updated at 14:48 GMT, Friday, 17 July 2009 15:48 UK

Allied Carpets in administration

Allied Carpets store
Any customers with queries are advised to contact their local store

Allied Carpets has gone into administration, as the stagnating housing market led to a fall in demand for carpets and flooring.

But 51 of its 217 stores and its insurance inspection business have been sold immediately, saving 400 jobs, administrator BDO Stoy Hayward said.

All stores are trading normally and outstanding customer orders will be fulfilled in all stores, it said.

Deposits are safe but anyone with queries should contact a local store.

All staff wages will be paid on the normal payment dates, the administrators said. About 1,100 staff work in the stores that have gone into administration.

Falling sales

Dermot Power, business restructuring partner at BDO, said that, like many companies, Allied Carpets had suffered in difficult trading conditions.

"The stagnation of the housing market has meant that fewer people are buying carpets and flooring," he said.

"We are currently working to secure a going-concern sale of the remaining stores in the Allied Carpets portfolio."

Allied Carpets is the second biggest carpet retailer in the UK, behind Carpetright.

BDO sold the 51 stores and the Allied Carpets brand to a new firm, Allied Carpets Retail Limited, set up by Allied chief executive Clive Hutchings.

Allied is not alone in having seen sales slump as demand for big-ticket homeware goods has fallen in the recession.

Last month, rival Carpetright reported a 72% drop in profits after sales fell 7.4% compared with the previous year.

The latest figures from the Office for National Statistics (ONS) show that sales in the last two months have seen the biggest declines since the ONS started keeping records in 1988.

According to the most recent figures, sales from household goods stores in the three months to May fell 7.3% compared with a year earlier.

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