Undated Newcast handout photo of an inside of a Carpetright store. PRESS ASSOCIATION Photo. Issue date: Tuesday June 28, 2011. Carpetright has reported a 70% slide in full-year profits and warned it will close more stores in an effort to weather the consumer downturn. The floor coverings specialist said profits reduced to £6.6 million in the year to April 30 after householders were put off making major purchases and also found it harder to obtain mortgages in order to move home. See PA story CITY Carpetright. Photo credit should read: Ben Fitzpatrick/Newscast/PA Wire
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Carpetright shops in Grampian and the Highlands are under threat of closure after the retailer announced restructuring plans that will see it axe poorly performing stores.
The struggling carpet chain operates shops in Aberdeen, Fraserburgh, Elgin and Inverness. The group said it was “exploring” a company voluntary arrangement (CVA) to help shore up its financial position, a move which would allow it to close loss-making shops and secure deep discounts on rental costs.
It is the third major retailer that has run into difficulties in recent months. A closing down sale is under way at Toys R Us and Maplin is currently in administration.
It is not known which Carpetright shops would close under the restructuring plans. If the CVA goes ahead, Carpetright would push through an equity issue of between £40m and £60m to fund plans to reboot the business.
The group, which has 409 UK shops, also agreed a £12.5m unsecured loan from major shareholder Meditor to help with “short-term working capital requirements”.
Carpetright chief executive Wilf Walsh said it would be “business as usual” during Easter.
