Car­petright clo­sures deal new blow to UK high streets

The Daily Telegraph - Business - - Business - By Rhi­an­non Curry

WILF WALSH, the Car­petright boss, blamed weak con­sumer spend­ing and too many large stores in bad lo­ca­tions for its de­ci­sion to close 81 more shops and tap in­vestors for £60m.

Mr Walsh likened the group’s trad­ing prob­lems to the strain in the ca­sual din­ing sec­tor as he dealt the lat­est blow to high streets af­ter a string of dire fi­nan­cial re­ports. “It ap­pears as if con­sumers have tight­ened their belts in terms of spend­ing dis­pos­able in­come,” he said. “In that way we’re suf­fer­ing like some of the restau­rant chains.”

Car­petright, which is­sued two profit warn­ings in as many months at the start of the year, said yes­ter­day that it would axe around 300 jobs as part of the lat­est wave of store clo­sures.

Over­all 92 sites of the floor­ing re­tailer have been ear­marked for clo­sure, although 11 have al­ready stopped trad­ing. Rent on an­other 113 is set to be slashed un­der com­pany vol­un­tary ar­range­ment (CVA) pro­pos­als be­ing put to land­lords.

The process heaps more pres­sure on prop­erty own­ers who have been asked to sign off on a num­ber of CVAs in re­cent months. They are not obliged to sign off on the terms, and could yet block Car­petright’s pro­pos­als. Car­petright will seek ap­proval for the CVA on April 26, and Mr Walsh said he was con­fi­dent that he would have land­lords’ back­ing, in­sist­ing that they had been “pleased with the ap­proach [Car­petright] is tak­ing”.

Car­petright has 416 shops in the UK and 136 in Europe. It hopes to re­lo­cate af­fected staff where pos­si­ble.

Mr Walsh said: “The prob­lem is we have a num­ber of stores which were opened in the Nineties that are on not very good re­tail parks in poor lo­ca­tions.” He added that where the com­pany has in­vested in a new look for stores, over­haul­ing the logo and lay­out, shops had been per­form­ing bet­ter.

The group – which em­ploys nearly 2,700 staff over­all – also con­firmed an in­vestor cash-call to raise around £60m through a rights is­sue to put it on a firmer fi­nan­cial foot­ing. The money will be used to fund the group’s strat­egy and re­duce its debt, as well as cover the cost of the CVA.

The com­pany still ex­pects to re­port a loss for the year to the end of April. Car­petright shares tum­bled 17pc in morn­ing trade, to 35p, be­fore end­ing down 8.1pc. The stock has fallen 80pc this year.

Mean­while, the ad­min­is­tra­tors for Toys R Us con­firmed that the brand’s re­main­ing

‘It ap­pears as if con­sumers have tight­ened their belts in terms of spend­ing dis­pos­able in­come’

75 stores would close by April 24, with the loss of 2,054 jobs.

Si­mon Thomas, joint ad­min­is­tra­tor and part­ner at Moor­fields, said: “We are work­ing closely with the 2,000 em­ploy­ees af­fected by the clo­sures to en­sure they re­ceive the sup­port they need for re­dun­dancy and other com­pen­satory pay­ments.”

De­spite a num­ber of high-pro­file re­tail ca­su­al­ties this year, Ed Cooke, head of in­dus­try body Revo, said: “A closer look at the re­tail­ers fac­ing dif­fi­cul­ties will clearly in­di­cate that the re­cent head­lines wrong­fully lead many to be­lieve the whole sec­tor is faced with the same fate, when in fact most of those re­tail­ers have ei­ther failed to evolve or are strug­gling due to busi­ness spe­cific fac­tors.”

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