Struggling Carpetright calls in re-structuring advisers
Carpetright is reported to have put itself up for sale and called in re-structuring advisers in a move that could lead to major store closures.
The 300-store chain has appointed PwC to launch a formal sale process as it struggles amid a slowdown in demand and increased competition, according to a report in The Times newspaper.
No formal bids have yet been made for the business. Sources have told The Times that a sale process is likely to be completed through some form of restructuring, such as a pre-pack administration or company voluntary arrangement (CVA).
We reported in May that the group was cutting around 70 jobs at its Essex headquarters, equating to more than 25% of head office staff, but the company said at that time that it was “not in planning” for another CVA. The retailer was forced to turn to a company voluntary arrangement in 2018 to exit over 90 under-performing shops and reduce rents.
Underlying losses before tax for the the 14 months to January 1, 2022 were £23.4 million, an improvement on a previous loss of £53 million.
In addition to 300 stores in the UK employing some 3,000 staff, the company has over 100 outlets in Holland, Belgium and Ireland.
Carpetright has been under intensive competitive pressure and was also hit by a serious cyber attack in April. It called in advisers Teneo earlier this year to look at cost-cutting measures.
Carpetright was founded in east London in 1988 by Philip Harris, later Lord Harris, who stepped down as chairman in 2014 and whose son Martin started the Tapi chain that has competed head-to-head with Carpetright ever since. (Martin Harris resigned from the Tapi board earlier this year.)
