High street woes continue as Carpetright to close one in four stores in restructuring plan
Carpetright says it is closing 92 stores and cutting 300 jobs as part of a restructuring plan. The retailer recently started talks with lenders to ensure it does not breach the terms of its bank loans.
The chain is planning a company voluntary arrangement (CVA) that will allow it to shut the worst-performing stores and ask for rent concessions on another 113 sites.
It is the latest in a long list of businesses to run into trouble.
Retailers are being pummelled as fewer people are moving home, which means lower demand for new flooring. Consumers are also having to tighten their belts as inflation has outstripped wage growth.
Many retailers are also struggling to adjust to the shift from in-store shopping to buying goods online. Carpetright, which has more than 400 UK shops, has been struggling with underperforming outlets which have made its rental costs harder to shoulder.
There have been similar, recent CVA arrangements at fashion retailer New Look and restaurant chains Jamie’s Italian, Prezzo and Byron.
The plight of Carpetright is not only a story of the struggling High Street, but also a tale of what is going on in the streets and avenues nearby.
The BBC recently revealed that homeowners are moving house half as often as they did before the financial crisis. Now, figures from surveyors have shown 12 consecutive months of falling demand from property buyers, with little sign of a turnaround.
So, with fewer people moving in to a new place, there is less demand for new fittings such as carpets and curtains. The squeeze on household finances means many of those staying put are delaying their plans to redecorate.
That is why the furniture store sales never seem to end, and why this sector is trying to find new ways to attract customers.