Carpetright has warned that profits this year will fail to meet City forecasts because of an expected loss at its ailing business in the Netherlands . Like-for-like sales in the UK increased 1.9% in the three months to 25 January but they fell 6.3% in the rest of Europe , including the Netherlands , taking currency movements into account. Lord Harris , Carpetrights's executive chairman, said: "Trading in our rest-of- Europe business continues to be dominated by the extremely difficult economic conditions in the Netherlands. As a result we now expect this business unit to be loss-making for this financial year. "In view of the market conditions, predicting the final outcome for the year with any accuracy is difficult and the result for the year will depend on our performance in the final quarter. With a further weakening of the market in the Netherlands , we now expect underlying pre-tax profits for the full year will be below the lower end of the current range of market expectations." Harris said trading in Britain was also difficult though UK profit should be in line with the group's expectations and more than last year. The weak UK trading comes despite a revival in the housing market and mortgage approvals, which usually signal an upturn for Carpetright's business. The profit warning is the second time in less than four months that Carpetright has been forced to guide down City expectations. Weak demand in the UK and problems in the Netherlands prompted a grim trading update in early October when former chief executive Darren Shapland was ousted and Harris took over running the business. The 71-year-old founded Carpetright in 1988. He has promised to overhaul the business by refurbishing stores, expanding online, cancelling burdensome store leases and selling more beds. He said in the trading statement that these "self-help" measures had helped the group increase sales in a difficult market. Carpetright is one of the companies under investigation by the Office of Fair Trading over misleading pricing of special offers. Its rivals United Carpets and Floors2go settled with the OFT last week and agreed to improve the way they advertise offers to customers. Carpetright's financial year ends on 26 April and it is due to post full-year results on 24 June.
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