Carpetright, caught in a downward spiral in the past year, will shut down a fifth of its stores in Great Britain in order to remain afloat. 300 people will subsequently lose their job.
Closing onerous stores
British carpet seller Carpetright will get rid of 92 stores in its home territory in an attempt to become profitable again. It currently has more than 450 stores, but a majority is not profitable enough. That was already quite clear when the company sent out a profit alert earlier this year, following disappointing Christmas sales. There had been slight like-for-like turnover increases (+ 1.9 % in Great Britain and + 5.4 % in the rest of Europe) in the previous year’s third quarter, but that revival was only short-lived.
The carpet store chain now wants to turn the tide by getting rid of its onerous real estate. A 12.5 million pound (15 million euro) loan has to alleviate any short-term pressure, but it will require more to lower the debt: that is why Carpetright is considering a 60 million pound (70 million euro) share sale.
Belgian textile manufacturer Balta, for whom Carpetright has long since been one of its major clients, foresaw the situation and shut down one of its three factories in November in order to cut costs. 300 people will lose their jobs in Great Britain because of Carpetright’s decision. Nothing has been said about its 92 Dutch and 23 Belgian stores.