The account was won without a formal pitch process from previous incumbent AMS Media.
Allied Carpets is owned by the Mulliez Family in France, who also currently own sports and leisure retailer Decathlon in the UK.
The French retail giant has a network of over 500 flooring stores across Europe, with 210 stores in the UK.
As well as carpets, woods, rugs and vinyls, Allied Carpets also sells furniture.
Dino Ioannou, communications planning director, Carat, said: “Allied have ambitious plans for their business and have appointed Carat to develop creative and innovative media strategies to drive their brand.
“We’re delighted to be working with this well-known retailer in 2005 and beyond.”
By James Livesley