Carpetright to close two Norfolk stores in company restructure which will see 300 jobs axed
PUBLISHED: 08:41 12 April 2018 | UPDATED: 15:59 12 April 2018
Carpetright says it will cut 300 jobs and close a total of 92 stores - including two in Norfolk - as part of a sweeping restructure.
The retailer’s branches in King’s Lynn and Great Yarmouth are among another 81 stores set to close, with 11 already having stopped trading, while it hopes to slash rents on a further 113 sites as part of a company voluntary arrangement (CVA).
It said it hopes to relocate staff where possible.
The chain, which employs nearly 2,700 staff, has also confirmed an investor cash call for up to £60m to put it on a firmer financial footing.
The details came as it revealed a “technical breach” of its banking arrangements, but the group said it was taking action to address this and ensure it is amended for the future.
Carpetright chief executive Wilf Walsh 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.
“We will remain in close contact with all colleagues to keep them fully informed as we move through this process.”
Shares in Carpetright tumbled 24% after details of the proposals and rights issue.
The firm, which has 409 UK shops, said trading had remained “difficult” since its last update on March 1, with the group continuing to expect a small underlying loss for the year to April 28.
It said the CVA – which is a form of insolvency aimed at protecting a business from going bust by cutting its costs – will help it to “address the competitive threat from a position of strength”.
Landlords will vote on the plans on April 26, while shareholders will have their say on April 30.
Carpetright has 38 stores across East Anglia including in Norwich, Ipswich, Lowestoft, Thetford and Sudbury.
The rescue deal, which is being handled by Big Four accountancy firm Deloitte, marks another dark day for the sector, which has already seen thousands of jobs axed following the collapse of well-known names Toys R Us and Maplin.