Carpet king Lord Harris of Peckham today unveiled a slump in annual profits and doubted there would be an economic recovery this year.

His Carpetright business saw returns plunge 72% to £16.7 million for the year to May.

But he can claim to have weathered the storm better than most.

With rivals struggling to stay in business, Carpetright looks likely to grab market share.

"It has been a very difficult time. But we have kept costs under control. I said before that I expected my 51st year of selling carpets to be extremely challenging," he said.

The chairman and chief executive controls 29.9% of the shares. He tried to put together a takeover deal 18 months ago, but it fell at the last when support from the banks dissolved.

Sales fell 7% to £482 million and debts rose from £57 million to £97million.

Carpetright has 695 stores, of which 128 are in Europe. The dividend for the year is 8p, down from 52p last time.

Said Harris: "Our principal markets are in recession and the likelihood is that with unemployment set to rise, the housing market will remain weak.

"We do not expect a return to more normal trading conditions for at least 12 months."