Carpetright woes as CVA activity results in £70.5m loss
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Carpetright has reported a £70.5m loss before tax as a result of the cost and accounting impacts of the group’s restructuring activity.
Total group revenue decreased by 3.0% to £443.8m and like-for-like sales for the full year declined by 3.6%, with the first eight weeks of the new financial year being affected by stock shortages due to suppliers withdrawing supply.
On 28 April a Company Voluntary Arrangement (CVA) proposal put forward by the directors of the company was officially approved, pulling the chain out of administration. The proposal included the closure of 92 stores, affecting around 300 jobs. At the time the company said it was not “sustainable” to keep stores open when more people are shopping online.
On 6 June the embattled retailer managed to secure the majority of the £60m funding it needed to fund its company voluntary agreement (CVA) and restructuring costs.
Wilf Walsh, CEO of Carpetright, said: “After a difficult trading year impacted by reduced consumer spend, increased competition and the legacy of an unsustainable, over rented store portfolio, the CVA and recapitalisation offers us the chance to rebuild Carpetright which remains the clear market leader in floor coverings with outstanding consumer brand awareness. This will be a transitional year for the group as we work through our recovery plan.”
