Carpetright is preparing to close nearly a quarter of its 300 stores in a restructuring plan as it struggles to avoid administration.
Today (12 April) the company released a statement saying it had entered a Company Voluntary Agreement (CVA), which if approved, would lead to the closure of 92 outlets by September 2018.
This could potentially affect more than 300 jobs.
Carpetright attributed the closures to the growing popularity of online shopping and said it “simply wasn’t sustainable” for it to keep all of 400+ stores, some of which are “less than five miles apart”.
Earlier this year, Carpetright issued a profit warning as total group sales were down by 2.3% and like-for-like sales (which exclude store openings and closures) were down 3.6%.
Carpetright will also be asking landlords for rent reductions of up to 50% on 113 more of its sites.
The approval of the CVA will depend on the company raising £60m to help cut debt and pay for the restructuring plan.
Carpetright will have a meeting with its creditors on 26 April, where it will seek approval. It will then hold a meeting with shareholders on 30 April to ask for their approval.
It a statement, the retailer said: “Following these potential closures, we will still retain a retail estate of approximately 300 stores so it’s likely that most customers will still have a Carpetright store nearby.”
The company went on to insist that this wouldn’t affect any outstanding customer orders, and said that any orders made after the closure of a store would be transferred to the nearest outlet.
The statement said: “The objective of the CVA is to establish a right-sized and right-rented estate of contemporary stores, complemented with a strong online offer, and it’s our belief that this is the best solution for our business and our customers. The CVA process will take some time to complete and we expect to be able to confirm the store closures within six weeks.”