Inside bitter ‘carpet wars’ between Carpetright and Tapi

Carpetright is being saved by the son of the company’s ‘carpet king’ founder who left his father’s business to set up a rival flooring firm. 

Martin Harris dramatically stepped in to save his family’s former carpet dynasty from collapsing into administration, with his new company Tapi agreeing to buy some of its struggling competitor’s shops.

Mr Harris, whose flooring tycoon father Lord (Philip) Harris of Peckham set up Carpetright in 1988, was a former director at the firm before stepping away and setting up rival chain Tapi in 2015. 

But he was blasted for cutting ties with Carpetright, which his father also left in 2014, with insiders accusing them of pursuing a ‘kamikaze strategy to try and take Carpetright down’ with Tapi, and poaching staff.

Now Tapi has agreed to buy 54 of the ailing chain’s 270 stores and two warehouses in a move that will save 300 jobs. 

However, the deal does not include some 200 other stores which now face the risk of closure, with more than 1,500 staff in the firing line.

It’s the latest chapter in the story of Britain’s top family of carpet-flogging entrepreneurs, who have built a flooring empire worth more than £110million.

Lord Harris took over the family store when he was just 15 after the death of his father – a British war hero who was awarded the Military Cross in the Second World War but died suddenly of stomach cancer, aged 39.

Operating from a single shop in his home in Peckham, Harris Carpets would expand to become Britain’s biggest carpet chain. 

He was later joined at the company, which officially became Carpetright in 1988, by Martin who served as development director and sat on the board.

However, Lord Harris retired and his son became disillusioned with the business, so both stepped down in 2014. 

It was reported that behind the scenes, the pair had fallen out with members of the board, which had brought in a new chief executive – Wilf Walsh, formerly of the sports bookie Fortuna Entertainment. 

Launching Tapi in 2015, Harris junior said he planned to open 200 stores over five years which would target the more affluent customer, and so far it has 91 stores.

‘There’s enough room in the market for more than one national retailer,’ he said at the time.

Martin said the decision to set up Tapi was not something that he plotted whilst at Carpetright, after 23 years with the firm.

‘I didn’t think the carpet industry was looking after its customers,’ he told the Retail Gazette in 2022. ‘No-one was, including Carpetright. I felt like I was banging my head against a wall there.’

But it was only after doing a 30-day Bikram yoga challenge – something his wife pushed him into doing after departing Carpetright – that he says he decided to set up his own venture, insisting the yoga has ‘cleared his mind’. 

He used the £500,000 from the shares he sold leaving the former family business to set up Tapi – which is close to ‘tapis’, the French word for ‘carpet’.  His father also became an adviser at the company.

The chain soon became yet another Harris carpet success story, with more than 175 stores across the UK, turning over almost £160million in 2022/23.

But the ‘aggressive’ tactics Martin’s company used to boost its size raised eyebrows among some in the business community, with its rapid growth coinciding with the decline of Carpetright. 

Many Tapi stores were opened close to Carpetright’s best-performing locations.

And there were accusations that the new company had poached many of the carpet giant’s employees. 

It triggered a war of words, with Carpetright blaming Tapi’s aggressive expansion for putting ‘significant pressure on the group’s best-performing sites’ when it launched a store 

Insiders within Carpetright also lashed out at the Harris family, accusing them of leaving a ‘toxic portfolio’ of leases that crippled their old business, and of pursuing ‘a kamikaze strategy to try to take Carpetright down’ with Tapi.

‘Carpetright made them rich, and it stinks,’ one insider told The Times. 

But Martin rejected the accusations. Defending his tactics, he added: ‘If you’re opening a flooring company and you know that there’s a location that’s really good, do you not go there? Do they have the God given right to be there on their own?’

‘In terms of us stealing their staff, I’d flip that around and say that they lost their staff.’

It’s understood Tapi was the only competitor to have made an offer that included saving both jobs and stores at Carpetright. 

Jeevan Karir, managing director of Tapi said: ‘Our goal, initially, was to try to save all of Carpetright.

‘However, as we looked into the details of the situation, we quickly established that saving the entire business was unviable.

‘The business has been materially loss-making for a number of years, and it has significant debt held by the owner.’

Administrators at PricewaterhouseCooper (PwC) were put on standby as Carpetright sought a ‘period of protection’ to secure additional investment.

Carpetright, which is owned by Nestware Holdings, has struggled against competitors Tapi.

The company, which is one of the nation’s biggest floor-covering retailers, has suffered weaker demand for carpets as homeowners shifted towards hard flooring. 

It was also hit by a major cyber attack in April which halted trading, with the firm saying the incident had impacted sales and affected attempts by the company to restructure its operations. 

Following a turbulent few months, Carpetright eventually filed a notice to appoint administrators two weeks ago, on July 12. 

Kevin Barrett, chief executive of Carpetright parent firm Nestware Holdings, said: ‘Our focus over the last week has been to secure external investment to ensure job security for a number of our Carpetright colleagues up and down the country.

‘Whilst we succeeded in finding a buyer, the deal is limited to a select number of stores rather than the business as a whole and will sadly impact a large number of colleagues and staff.

‘We have tried everything to turn Carpetright around and I’m truly sorry that we were unable to save more jobs.

‘The deal will not affect Carpetright in Europe or other brands within Nestware Holdings including Keswick and Trade Choice.

‘The Floor Room will continue to trade and serve customers via concessions at John Lewis and we will be working hard to secure job opportunities across these businesses to support Carpetright staff wherever we can.’

The company has been no stranger to difficult times, having gone through a form of insolvency proceedings six years ago to cut costs. 

At the time, it was forced to close 81 stores after reporting a full-year loss of over £70million.

Another problem for the firm has been new competitors on the market.

Since it started business operations, Tapi has grown quickly and now has more than 150 stores, alongside a website and delivery service.

Meanwhile Carpetright has seen business slump. 

It was also targeted by a ‘software attack’ in April which increased financial pressures, The Sun reported.

One insolvency expert described the attack as the ‘straw that broke the camel’s back’.

Hackers targeted the company HQ in Purfleet, Essex, sending malware to gain unauthorised access.

Carpetright’s network was taken offline due to the cyber attack but bosses insisted that the virus was isolated before any data was swiped.

Staff and hundreds of customers were affected by the malicious virus with employees unable to access their payroll information.

A source said at the time: ‘Some staff networks were taken down including the portals that workers use to book time off and look at payslips.

‘It happened abruptly and was worrying because customers couldn’t get through to helplines.

‘Everything at HQ was taken offline as that was the best way to stop the attack spreading to customer data.’

Another problem facing Carpetright is the general economics of the UK. 

Rebecca Dacre, partner at Mazars, told CityAM: ‘We are unlikely to see the retail sector trading comfortably until interest rates start to fall.

‘Despite inflationary pressures easing, high interest rates and low consumer spending continue to persist.

‘The rise in the National Living Wage is the largest on record and some face a sharp rise in business rates from April.

‘One of the issues that chains like Carpetright will face is who will want to rent their excess space.’

After Carpetright was founded in 1988, it enjoyed years of success, listing on the London Stock Exchange in June 1993. 

It was taken off the stock market in 2019 by its biggest investor, Meditor, which had taken on almost 30 per cent of its shares and more than £40 million of its debts. 

Kevin Barrett, CEO of Nestware Holdings, which is owned by Meditor, said: ‘We remain focussed on securing external investment to ensure as few customers and colleagues are impacted as possible.

‘They are our main priority and we are taking all appropriate action to make sure they are informed and supported through this process.

‘We have begun promising conversations with interested parties that are moving in the right direction, encouraging us that Carpetright has a viable future.’

MailOnline has approached Tapi and Carpetright for comment.