Carpetright stores across the Midlands facing closure

Britain's Carpetright seeks to close 92 stores in restructuring

Britain's Carpetright seeks to close 92 stores in restructuring

Carpetright will also need interim funding of £15m to ensure it has enough working capital before the placing completes, and said it was "in discussions with a key stakeholder" to secure this funding.

Under the restructure, the chain will also be slashing the rent on another 113 stores under the company voluntary arrangement (CVA) proposals being put to landlords.

"Regrettably, we expect this will mean that around 300 colleagues would leave the business but we will make every effort to find alternative roles for those affected wherever possible".

Following a review of its property portfolio, Carpetright has identified 205 sites in the United Kingdom that are underperforming and/or on unfavourable lease terms, or, in certain cases, not expected to have significant strategic value in the future.

A Carpetright spokesperson said: "We're announcing some tough but necessary steps to address our legacy property issues and restore our profitability".

Trading conditions remain hard for the group, which still expects to incur a small underlying pre-tax loss for the FY year ending 28th April 2018.

The retailer has confirmed that the store on the corner of Foss Islands Road and Layerthorpe is among those earmarked for closure.

The company said the closures were necessary to "restore the viability of the group's business model" as it struggles to survive amid a slowdown in the housing market and a squeeze on consumer spending which has dampened demand for expensive household goods.

These closures would result in the loss of around 300 jobs across the country.

"We are launching a CVA proposal that, if approved, will result in the closure of 81 poorly located or over-rented stores, from a United Kingdom total in excess of 400, later this year".

"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, enabling Carpetright to address the competitive threat from a position of strength", he added.

The company intends to provide further detail a few days after creditors vote on the CVA proposal on 26 April.

"We will remain in close contact with all colleagues to keep them fully informed as we move through this process".

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