Five branches of Carpetright to close in Northern Ireland - 300 jobs axed nationwide
Five branches of retail giant Carpetright are set to close in Northern Ireland.
It comes as the store announced closures of 92 stores across the United Kingdom, resulting in a loss of 300 jobs to allow for a restructuring plan to be enacting.
There are eight branches of Carpetright in Northern Ireland, with stores in Londonderry, Coleraine, Ballymena, Cookstown, Bangor, Newtownabbey, and two stores in Belfast.
Stores in Northern Ireland expected to close by the end of September are located in Ballymena, Bangor, Newtownabbey, Coleraine and Derry.
The chain said that, overall in the UK, 92 sites had been earmarked for closure, although 11 have already stopped trading, with the rent on another 113 set to be slashed under the company voluntary arrangement (CVA) proposals being put to landlords.
It said it hopes to relocate staff where possible.
The group – which employs nearly 2,700 staff in total – also confirmed an investor cash-call to raise around £60 million through a rights issue to put the company 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 more than 23% at one stage 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.
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.
High street retailers have been hit by a drop in consumer spending, soaring costs and the increasing threat of online competitors.
The British Property Federation (BPF) praised Carpetright for taking early action to address its trading woes.
Stephanie Pollitt, assistant director of real estate policy at the BPF, 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.”
She added: “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.”
Belfast Telegraph Digital