RISKY BUSINESS
Major homeware brand with 274 locations up for sale ‘putting stores at risk of closure’
Watch our video to find out why retailers across the country are closing branches
A MAJOR homeware brand with 274 branches across the UK has been put up for sale by administrators leaving stores "at risk of closure".
Carpetright has drafted in accounting firm PricewaterhouseCoopers (PwC) to launch a formal sale process.
1
It is not yet known whether any potential bidders have expressed an interest in buying out the retailer.
However, as first reported by The Times, sources have warned shops could close as part of the process.
Of course, this is not guaranteed and all Carpetright stores remain open for business while its 2,000 staff will remain in position for now.
The Sun has approached Carpetright for a comment.
Read more in Money
The British stalwart, founded in 1988, brought in restructuring experts Teneo earlier this year to look at cost-cutting measures.
The chain currently has 274 stores across the UK according to its website, and is one of the country's biggest floor-covering retailers.
A lack of consumer spending in recent years and a rise in competition are thought to have caused problems for the brand.
In April, a spokesperson for Carpetright told The Sun it was "not in planning" for another company voluntary arrangement (CVA), which it last filed in 2018 and resulted in the closure of 92 sites.
Most read in Money
A CVA is a way for a business to restructure but continue to keep trading, but typically it closes some stores and negotiates rent costs down.
Carpetright reported revenues of £372.6 million in the 14 months to January 1, 2022, compared to £493.2 million in the 18 months to October 31, 2020.
The Body Shop to close seven stores immediately
According to Companies House, underlying losses before tax for the same period were £23.4million - down from £53million.
Carpetright opened its first shop in east London back in 1988 by the boss Philip Harris, who stepped down in 2014.
It was delisted from the London Stock Exchange in 2019 when it was bought by Meditor.
The hedge fund had bought almost 30% of the company’s shares and more than £40million of its debts the year before.
Retailers closing stores in 2024
RETAILERS have been hit by soaring inflation and a downturn in spending due to the cost of living crisis.
High energy costs and a move to shopping online are also taking their toll.
Some high street shops have closed due to businesses opening up in different locations such as larger retail parks.
Shops may also close due to a number of other reasons, such as rising rents.
We explain which retailers are closing in 2024:
- Argos - The brand announced plans to close 100 standalone UK branches last year as it looks to move away from the high street and focus on expanding its presence in supermarkets.
- B&Q - The chain has over 300 shops across the UK, with two stores closing this year due to leases not being renewed. It has plans to open more in 2024 too.
- Boots - The health and beauty chain announced that it would be closing 300 stores last July. Closures are ongoing and this will see the retailer's estate reduced from 2,200 to 1,900 shops.
- Clintons - Clintons mulled plans to close 38 shops in a bid to avoid insolvency late last year. We've listed the stores affected.
- Costa Coffee - The caffeine giant has around 2,000 sites nationwide, so chances are you'll have one near you. The chain has shut the doors to dozens of its sites recently. We've revealed which stores are due to close this year.
- Iceland - The supermarket has more than 900 stores but closed nearly two dozen sites in 2023, and more selected shops are due to shut.
- Lidl - The supermarket, which has 950 stores, is changing up shop locations, which has meant that some stores have to close. But the retailer is also looking to open 12 new supermarkets.
- M&S - M&S, which runs 405 stores across the country, has been closing a string of branches across the country in a blow for shoppers. It's not all bad news, though, because the chain also has big plans to open dozens of new shops.
- Trespass - The firm announced in July last year that it was closing six branches, but more are on the way.
- WHSmith - The retail giant, which runs over 1,100 stores, has shut eight stores since March 2023, but more are coming.
What else is happening to homeware chains?
The news today follows a tricky time for home improvement chains, both large and small.
It comes as shoppers have been cutting back on spending following the pandemic.
Plus the recent turmoil in the housing market has meant that homeowners aren't as focused on DIY projects as they once were.
In Spring, Kingfisher, which owns both B&Q and Screwfix, revealed annual profits slumped by more than a quarter.
The company reported a 25.1% drop in underlying pre-tax profits to £568million for the year to January 31, 2024.
Window and door specialist Everest called in administrators in April leaving customers in the dark over their orders
Last year, the group had previously cautioned profits would slip after a 36% drop in pre-tax profits from £1billion to £611million in the 12 months to January 2023.
Rival Wickes, also reported a 31% fall in profits to £52million on flat revenues of £1.55billion for 2023.
READ MORE SUN STORIES
Windows and doors company Safestyle collapsed into administration in October last year.
The company has a manufacturing site in Wombwell, near Barnsley and 42 sales branches and depots across the country.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories