Carpetright is preparing to close 92 underperforming stores through a CVA and raise £60m in a restructuring plan.
The retailer said in a statement that it was pursuing the CVA process in order “to address its legacy property issues and reduce the size of its UK property estate and rental cost base”.
Scroll down for the full list of closures.
It has identified 205 sites in the UK that are either underperforming, not on favourable lease terms, or that are not expected to have any significant strategic value to the company moving forwards.
Some 92 sites have been earmarked for potential closure, eleven of which have already stopped trading. Rent on a further 113 stores will be reduced through the CVA process.
The group has also said that it is looking to raise around £60m through a rights issue. The proceeds will be used to fund the group’s ongoing strategy, reduce debts and cover the costs that will be incurred by the CVA.
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The announcement follows Carpetright’s trading update on 1 March when it said that market conditions “remained difficult”.
Wilf Walsh, Carpetright chief executive, 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.
“Carpetright has engaged fully with the British Property Federation on the detail of the CVA Proposal and we thank them for their constructive approach.
“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.
“We will remain in close contact with all colleagues to keep them fully informed as we move through this process.”
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Stephanie Pollitt, assistant director of real estate policy, British Property Federation, said: “These situations are never easy as landlords need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal.
“Carpetright and Deloitte, however, have demonstrated best practice, constructively engaging with the BPF early in the process and ensuring landlords’ interests have been properly taken into account. Ultimately, it will be for individual landlords to decide how they will vote on the CVA, but the proposal has sought to find a solution that works for all parties.”
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