CARPETRIGHT has put jobs under threat as it’s planning to close poorly performing shops and restructure its business.
The trouble retailer, which has 409 shops in the UK, said it was “currently exploring” a company voluntary arrangement, which would allow the group to shut loss-making stores and reduce rent.
We do not yet know how many stores will close or how many jobs will be affected by the closures.
A Carpetright spokesman told the Sun Online: “No final decision has been taken and it is too early to confirm which stores may be affected.
“We have also announced a successful fund raising which will enable us to make the necessary decisions on this process free from short term funding pressure.
“In the interim, it is very much business as usual for all of our stores and we look forward to serving customers through the important Easter trading period.”
If the company voluntary agreement goes ahead, Carpetright said it would tap investors for between £40 million and £60 million to fund plans to reboot the business and drive down debt.
In a string of updates, the group also revealed that it had secured £12.5 million in funding from one of its biggest shareholders Meditor.
Carpetright boss Wilf Walsh said he is pleased the company has secured additional support from one of its shareholders.
He said: “These further cash resources will enable us to make the necessary decisions free from short-term funding pressure.”
He also blamed previous bosses of the company for pursing an “aggressive store opening strategy.”
He added: “The company has worked hard over recent years to address this legacy issue and reduce the size of its property estate, however many of these poor performing stores still have long leases to run, which has limited our ability to exit a meaningful number in the short-to-medium term.”
Earlier this week, the retailer’s shares slumped 11 per cent after a report suggested it would cut jobs and close stores as part of a rescue plan to stop it going into administration.
This follows a recent high street slump affecting Toys R Us, Prezzo, Jamie’s Italian, Bargain Booze and burger chain Byron.
High street stores have been suffering from falling consumer demand, more people choosing to shop online rather than instore and higher overheads.
Hannah Maundrell, editor in chief of money.co.uk said: “The pattern of well loved stores filing for administration or cutting jobs over the last few weeks is terrible news for the UK’s high streets.
“Retailers have faced the perfect storm in the last few months of high Inflation, lack of rises in wages and shoppers turning to online retailers in search for bargains, resulting in high streets up and down the country turning into ghost towns.”
“It’s incredibly distressing news for employees of Carpetright especially as their fates with the businesses are currently uncertain. With the worst performing stores set to be closed, many employees will have their fingers crossed they won’t be the unfortunate ones out of work.”
A quarter of the UK’s biggest retailers could struggle to pay their debt payments this year if interest rates rise.
Jamie Oliver’s Italian restaurant chain is currently in £71.5 million pounds worth of debt.
Without a cash injection high street off licence chains Bargain Booze and Wine Rack could go under.
The chains owned by drinks giant Conviviality have 700 stores in the UK and employs 2600 people.
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