Carpetright to close 92 stores as part of restructuring plan
Carpetright has said it will close 92 stores as part of a restructuring plan designed to help turn around its struggling business.
In a statement, the company said it had finalised the terms of a company voluntary arrangement to restore the viability of its business model. This will include a restructuring of its property portfolio.
Carpetright said some 205 UK stores have been identified as being underperforming or on unfavourable lease terms. Of these, 92 sites will close while the remaining 113 sites will be subject to a reduction in rental costs and revised lease terms. The retailer will seek creditor approval of the CVA proposal at a meeting to be held on 26 April.
Wilf Walsh, Carpetright chief executive, said: "These tough but necessary actions will enable us to address the burden of a legacy UK property estate consisting of too many poorly located stores on unsustainable rents and are essential if we are to restore our profitability and deliver a successful turnaround. Carpetright has engaged fully with the British Property Federation on the detail of the CVA Proposal and we thank them for their constructive approach.”
The retailer also expects to raise around £60 million through an equity capital raising, which is likely to be by way of a placing and open offer. The proceeds will be used to fund Carpetright’s ongoing strategy, reduce its debt and cover the costs of the CVA. This will be launched on or around 18 May.
Walsh added: "Completion of the CVA and equity financing will enable us to establish an appropriately-sized estate of modernised stores, on economic rents, complemented with a compelling online offer."
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