Are Carpetright and Mothercare the next chains on the brink?

FEARS are growing for the future of Mothercare and Carpetright as their stocks plummeted following the collapse of Toys R Us and Maplin.

Shares in Carpetright hit an alltime low of 60.3p as it issued a third profit warning in four months, stripping £11.9m from its value. It said it was in talks with bankers over its loan terms.

Investors in Mothercare were spooked by the retailers’ woes, sending shares down 9pc on Wednesday and then 12.4pc yesterday – wiping £6m off the firm.

More than 5,000 jobs were jeopardised this week at Toys R Us and electronics retailer Maplin as they fell into administration. The High Street is struggling to compete with the rise of online shopping, and mounting inflation is hitting spending.

Disappointing Christmas sales forced Mothercare to cut profit expectations in January. The chain has 1,131 shops, of which 152 are in the UK. Around 40 to 60 of these shops could be axed.

Russ Mould, investment director at AJ Bell, said: ‘Big supermarkets and major online rivals have smartly advanced onto the firm’s patch, either doing it more cheaply, more efficiently via the internet, or both.’

Carpetright, which has 426 stores and employs 3,206 people, expects to report a loss for its results covering the year ending April 28, after a second profit warning in January slashed its share price by 48pc.

It was valued at as much as £471m four-and-a-half years ago, but the shares has plunged 91pc.

Mothercare has suffered a similar fall – but over three years – from a peak valuation of £503m.

Carpetright issued its first warning in December after revealing that profits were all but wiped out in the 26 weeks to October 28, falling 93pc to just £300,000.

In an update it said sales growth remained negative at its UK business and was likely to remain below expectations. It is in talks with lenders to assure them it can meet their terms.

Analysts at Peel Hunt are preparing for Carpetright to rack up losses of £4.3m having previously pegged it for profits of £3m.

Lee Wild, head of equity strategy at Interactive Investor, said: ‘Things haven’t improved since the last profits warning in January, and the company will lose money this year.

‘It has the backing of its lenders for now, but a strong Easter is crucial for the business and any goodwill that remains.’

The company has been struggling to attract customers who are reluctant to splash out on big-ticket purchases.