Carpetright to shut a dozen Scottish stores

● A quarter of group’s outlets will shut and hundreds of jobs lost across UK

Carpetright is set to close a dozen Scottish stores as the floor covering retailer became the latest casualty in an increasingly grim year for the country’s high street.

The company has unveiled plans to shut more than 80 outlets across Britain in a move that will cost hundreds of jobs. The rent on another 113 stores would be cut in drastic cost-saving measures.

Hundreds of jobs are to be axed at Carpetright after the retailer unveiled plans to shut more than 80 stores, a dozen of them in Scotland, in the latest blow to Britain’s battered high street.

Overall, 92 sites were singled out for closure, although 11 have already stopped trading, with the rent on a further 113 set to be slashed under restructuring proposals being put to landlords. The firm hopes to relocate staff where possible.

The group, which employs nearly 2,700 staff in total, also yesterday outlined an investor cash-call to raise around £60 million to put the business on a firmer financial footing.

North of the Border, stores in Ayr, Edinburgh (Leith), Falkirk, Fraserburgh, Glasgow (Great Western Road and Parkhead Forge), Greenock, Hamilton, Inverness, Livingston, Renfrew and Wishaw are being axed.

It marks another dark day for the retail sector, which has already suffered thousands of job losses following the collapse of Toys R Us and Maplin. Other chains have been trimming store portfolios.

High street retailers have been hit by a slump in consumer confidence, rising costs and the migration to online shopping.

The shake-up at Carpetright came as it revealed a “technical breach” of its banking arrangements, but the group stressed it was taking action to address this and ensure it is amended for the future. Chief executive Wilf Walsh said: “These tough but necessary actions will enable us to address the burden of a legacy UK property estate 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.”

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

It said its company voluntary arrangement (CVA) – 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 26 April, while shareholders will have their say at the end of this month. The rescue deal is being handled by Deloitte. The British Property Federation praised Carpetright for taking early action to address its trading woes.