YET another retail giant is set to close a number of its stores in what has become a year of ‘meltdown’ for some of the most famous names on the High Street and at out of town shopping centres.
More than 80 Carpetright stores have been earmarked for closure under a proposed company voluntary arrangement (CVA) with a further 113 sites being subject to a reduction in rental costs and revised lease terms. The move places about 300 jobs at risk.
Carpetright has said that it was exploring the feasibility of a CVA and a fundraising of between £40m and £60m to help drive a turnaround forward.
Now, the listed business has finalised the terms of a CVA which is intended to restore the viability of its business model and undertake a “fundamental restructuring of its property portfolio”.
205 sites in the UK have been classed as underperforming and or/on unfavourable lease terms or in some cases not expected to have significant strategic value in the future.
92 sites of these sites including 81 which currently trade as Carpetright, have been identified for closure in the short term under the CVA proposal, with the balance of 113 sites being subject to a reduction in rental costs and revised lease terms.
300 jobs are said to be at risk although Carpetright, which employs approximately 2,700 workers, said efforts would be made to redeploy affected staff at other stores.
In addition, Carpetright currently expects to raise net proceeds of approximately £60m through an equity capital raising. These proceeds will be used to fund the group’s on-going strategy, reduce indebtedness and cover the costs associated with the CVA.