High Street

Carpetright expects £9m profit drop

Carpetright has warned pre-tax profits will fall £9m for the year ending 28 April 2018.

According to the carpet retailer this performance, combined with that of the previous nine months, will result in full year like-for-like sales falling by 3.6%. Like-for-like sales in Europe fell 8.3% in the final quarter, against a similar trading background to that experienced in the UK, with the full year figure being an increase of 1.1%.

In a statement the group said: “Continued weakness in consumer confidence, coupled with inevitable disruption to trade arising from the publicity associated with Carpetright’s ongoing restructuring activities, resulted in like-for-like sales falling by 10.5% in the final quarter of the financial year.”

On 28 April a Company Voluntary Arrangements (CVA) proposal put forward by the directors of the company was officially approved, pulling the chain out of administration.

In March the beleaguered flooring retailer announced it was seeking an insolvency deal to allow it to continue trading while it negotiated rent reductions and debt restructuring. The number of locations facing the axe still hasn’t been revealed, though some predict around 100 are likely to be affected.

CEO of Carpetright, Wilf Walsh, said: “The CVA Proposal will enable us to take the tough but necessary actions needed to restore our profitability. Having now received approval from both shareholders and creditors we will press ahead with our plans for the proposed equity financing to recapitalise the business and enable Carpetright to address the competitive threat from a position of strength.”

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