Jobs at risk as carpet company eyes shop closures
The flooring company, which has shops in Welwyn Garden City and Potters Bar, has announced the possibility of closures.
The high street carpet company Carpetright has announced today that it is considering entering into a Company Voluntary Arrangement (CVA), a form of agreement that allows companies with debt issues, or is insolvent, to agree a way to make repayments to its creditors.
A spokesperson for Carpetright said the company has been “burdened with too many poorly located stores on rents which are simply unsustainable,” and that a CVA would result in some shops closing.
The company then plans to raise £40-60million through an equity issue.
For short-term capital, Carpetright has also entered into an unsecured loan agreement with one of its shareholders, Meditor European Master Fund Limited, for a sum of £12.5million.
Carpetright has over 240 shops nationwide and employs over 3,000 people.
Wilf Walsh, Carpetright’s chief executive officer, said: “The aggressive store opening strategy pursued by the company’s previous leadership has left Carpetright burdened with an oversized property estate.
“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.”
The spokesperson added: “No final decision has been taken and it is too early to confirm which stores may be affected.
“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.”