More trou­ble on high street as Carpetright plans store clo­sures

South Wales Echo - - NEWS -

CARPETRIGHT is to shut some of its stores in South Wales as part of plans to axe 300 jobs.

The high street re­tailer said it is clos­ing more than 90 stores as part of a re­struc­ture.

The chain said that 92 sites had been ear­marked for clo­sure, although 11 have al­ready stopped trad­ing, with the rent on an­other 113 set to be slashed un­der the com­pany vol­un­tary ar­range­ment (CVA) pro­pos­als be­ing put to land­lords.

It will see the clo­sure of its stores in Black­wood, Caer­philly and Llanelli.

The group - which em­ploys nearly 2,700 staff in to­tal - also con­firmed an in­vestor cash-call to raise around £60m through a rights is­sue to put the com­pany on a firmer fi­nan­cial foot­ing.

It said it hopes to re­lo­cate staff where pos­si­ble.

The de­tails came as it re­vealed a “tech­ni­cal breach” of its bank­ing ar­range­ments, but the group said it was tak­ing ac­tion to ad­dress this and en­sure it is amended for the fu­ture.

The an­nounce­ment is the lat­est in a num­ber of chains which have an­nounced the clo­sure of some its branches.

New Look will also shut eight stores in Wales as well as the clo­sure of all Toys R Us UK stores.

Bar­gain Booze, Se­lect, Car­luc­cio’s and Jamie’s Ital­ian have also re­ported fi­nan­cial dif­fi­cul­ties this year.

High street re­tail­ers have been hit by a drop in consumer spend­ing, soar­ing costs and the in­creas­ing threat of on­line com­peti­tors.

Carpetright chief ex­ec­u­tive Wilf Walsh said: “Th­ese tough but nec­es­sary ac­tions will en­able us to ad­dress the bur­den of a legacy UK prop­erty es­tate con­sist­ing of too many poorly lo­cated stores on un­sus­tain­able rents, and are es­sen­tial if we are to re­store our prof­itabil­ity and de­liver a suc­cess­ful turn­around.

“We will re­main in close con­tact with all col­leagues to keep them fully in­formed as we move through this process.”

Shares in Carpetright tum­bled more than 23% at one stage af­ter de­tails of the pro­pos­als and rights is­sue.

The firm, which has 409 UK shops, said trad­ing had re­mained “dif­fi­cult” since its last up­date on March 1, with the group con­tin­u­ing to ex­pect a small un­der­ly­ing loss for the year to April 28.

It said the CVA - which is a form of in­sol­vency aimed at pro­tect­ing a busi­ness from go­ing bust by cut­ting its costs will help it to “ad­dress the com­pet­i­tive threat from a po­si­tion of strength”.

Land­lords will vote on the plans on April 26, while share­hold­ers will have their say on April 30.

The res­cue deal is be­ing han­dled by ac­coun­tancy firm Deloitte.

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