Carpetright makes ‘substantive progress’ on restructuring despite further losses
Struggling Carpetright has revealed the extent of the pain the retailer has faced since going through a major restructuring.
Bosses at the chain saw sales plummet 13.4% to £386.4 million, although pre-tax losses improved, from £69.8 million to £24.8 million in the year to April 27.
However, chief executive Wilf Walsh said the Company Voluntary Agreement in April 2018 was on track to help the firm improve its fortunes.
He added: “While it’s clearly too early to declare the job done, we have made substantive progress in the key areas that drove us to make the difficult but necessary decision to restructure the business via a Company Voluntary Arrangement (CVA) and re-capitalisation.
“Subsequent moves by a host of other retailers to do the same proves that we are not unique in pursuing a plan to build a sustainable and successful future for the brand.”
The first half of the year was particularly difficult for Carpetright, with sales collapsing, on a like-for-like basis, by 12.7%.
But this was improved in the second half of the year, with like-for-like sales down 5.4%.
Mr Walsh added that the eight weeks from April 27 were positive, with like-for-likes up 8.5% – against weak comparisons.
The retailer is on track to make annual savings of £19 million from the CVA, with 80 stores closed and 23 seeing their rents cut to £0.
Mr Walsh also said he believed the retailer was strongly place to keep its position on the high street, warning that any competitor would need deep pockets to break into the flooring market.
“We have been extremely robust in taking on competition and it’s clear that this is a very difficult market for a new entrant and brand to gain traction unless they are prepared to pursue an uneconomic model, of course until time and money run out,” he said.
Carpetright was one of the first retailers to take on its landlords in a CVA, to reduce rents and lease lengths across its stores. However, since then, several chains have turned to landlords to help them out, including Sir Philip Green’s Arcadia and Debenhams.