More trouble on high street as Carpetright plans store closures
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.