Carpetright shares tumble on report of store closures
Shares in Carpetright fell sharply yesterday, with traders pointing to a weekend report that the retailer is considering closing some of its stores, in response to mounting financial pressures.
Earlier this month, Carpetright said that it was battling difficult trading conditions, and that it expected its financial performance for the year to the end of April to be worse than previously expected. It said at the time that it forecasts a small underlying pretax loss for the year and that it was “proactively engaged in constructive discussions with its bank lenders in order to ensure it continues to comply with the terms of its prevailing bank facilities”. It also said that it was examining a “range of options to accelerate the
turnaround of the business and strengthen its balance sheet”.
Over the weekend, The Telegraph reported that the company was considering closing shops as part of a turnaround plan. This year has already seen Toys R Us and Maplin tumble into administration in the UK. Other high street names have cut scores of jobs and shuttered outlets to save costs. Pressure is stemming from a rise in business rates, higher minimum wages and a jump in inflation triggered by a fall in the value of the pound after the Brexit vote.
A spokesperson for Carpetright declined to comment on the report when questioned by The Independent yesterday. “As announced on 1 March, we are examining a range of options to accelerate the turnaround of the business and strengthen its balance sheet. This process is ongoing and the group will update the market on these initiatives as required,” the spokesperson said.
Carpetright, which is Britain’s biggest floor coverings retailer, has over 400 stores in the UK and more than 130 international outlets, predominantly in the Netherlands.