Carpetright floored by £8.7m loss as closures loom
Carpetright, which is planning to close five stores here with the potential loss of around 15 jobs, has swung to a loss as the retailer battled with rapidly declining sales.
It made an underlying loss before tax of £8.7m for the year to April 28, having made a profit of £14.4m the year before.
It is to close stores in Ballymena, Bangor, Newtownabbey, Coleraine and Londonderry at the end of September.
Each store has around three staff but it's understood some could be offered redeployment to the remaining stores in Cookstown, and in Belfast's Boucher Road and Connswater.
Carpetright's statutory loss before tax was £70.5m, compared to a profit of £900,000 in the prior year, which the firm said was driven by the cost of its store closure programme.
Group revenue at Carpetright fell by 3% year-on-year, down from £457.6m to £443.8m.
In the UK, like-for-like sales were down by 3.6%, with the sales decline accelerating from 0.7% in the first half of the year to 7.8% in the second half.
Carpetright's results come after it pushed through a Company Voluntary Agreement (CVA), a restructuring procedure allowing it to shut 81 stores.
The store closure programme, which is due to be completed by the end of September, will lead to the loss of hundreds of jobs.
Carpetright said trading was "heavily impacted" while it was putting together its CVA as some suppliers withdrew their supplies, leading to stock shortages. Net debt jumped to £53m, up from £9.8m, which Carpetright said was due to suppliers tightening their credit terms in response to the distress in the business.
Wilf Walsh, Carpetright's chief executive, said: "After a difficult trading year impacted by reduced consumer spend, increased competition and the legacy of an unsustainable, over-rented store portfolio - the CVA and recapitalisation offers us the chance to rebuild Carpetright which remains the clear market leader in floor coverings with outstanding consumer brand awareness. This will be a transitional year for the group as we work through our recovery plan."
The retailer also secured £65m of equity financing to fund the business while it carries out store closures. It said suppliers had started to replenish stocks after the CVA approval.