By Geoff Percival
A cost-cutting plan to close 92 stores will not affect struggling British flooring retailer Carpetright’s shops in the Republic, but it will result in job losses in the North and effectively halve the company’s presence there.
Carpetright is to seek creditor approval to close 92 stores and reduce rents at 113 further sites in a bid to cut costs as part of a wider restructuring plan.
While staff redeployment has been mentioned, the move is likely to result in approximately 300 job losses.
The restructuring plan also involves Carpetright raising £60m (€69m) via a share placing and open offer to reduce its debt pile and fund the closures.
Most of the closures will take place in the UK, where Carpetright has 400 stores. The company’s 20 stores in the Republic will not be affected. However, the list of stores earmarked for closure includes five in the North — at Ballymena, Bangor, Coleraine, Derry, and Newtownabbey.
That will decrease Carpet-right’s presence in the North from eight to three shops — the remaining ones
set to be in Belfast, Connswater, and Cookstown.
There could be up to 20 job losses in the Northern Ireland, as Carpetright typically employs three-to-four people per store.
Shares in Carpetright — which has in recent months issued a series of profit warnings because of weak UK retail spending and what it calls poorly-located outlets — fell by as much as 19% on the back of the news.
Many retailers are suffering from brutal trading conditions on the British high street, with Toys R Us UK and electronics retailer Maplin having already been pushed into administration this year, while fashion retailer New Look has also closed stores.
Consumer spending has come under pressure in Britain as inflation has run ahead of wage rises and sentiment is affected by economic uncertainty due to Brexit.
Traditional retailers are also battling competition from booming online specialists.
Carpetright said it would seek creditor approval at a meeting on April 26 for a company voluntary arrangement (CVA) process to allow the shop closures and lower rents, before asking shareholders for their backing on April 30.
Carpetright’s chief executive Wilf Walsh said that if the CVA gets a green light, it would help put Carpetright in a position to return to profitability.
Additional reporting Reuters