Carpetright has filed a notice of intention to appoint an administrator, putting 1,800 jobs at risk as it races to secure extra funding. The company filed the notice with the high court to appoint administrators while it worked to finalise new investment to protect its long-term future.
The move gives the company 10 days protection from creditors while negotiations continue and Carpetright tries to secure a future for its 272 stores, which employ 1,852 people in the UK. The retailer will continue to trade.
Kevin Barrett, the chief executive of its parent company Nestware Holdings, said: “We remain focused on securing external investment to ensure as few customers and colleagues are impacted as possible. They are our main priority and we are taking all appropriate action to make sure they are informed and supported through this process.
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“We have begun promising conversations with interested parties that are moving in the right direction, encouraging us that Carpetright has a viable future.” The firm has been struggling with a slump in sales and it recently appointed Teneo to explore cost-saving measures.
The retailer blamed the financial pressure on the software attack which occurred in April, and left it unable to trade online and in-store for almost a week. Carpetright said this disrupted plans to restructure and ultimately led to the company seeking a period of protection while sale negotiations proceed.
Sources told The Times the sale was likely to be completed through a pre-pack deal or company voluntary arrangement. The notice of intention to appoint administrators does not mean Carpetright has collapsed today.
Carpetright currently has 272 stores and employs 1,852 people in the UK. The update today comes after the business revealed it was looking to axe more than 25% of its head office staff, putting around 70 jobs at risk.
The job cuts were across IT, warehousing and distribution with the retailer saying the move would reduce costs by around £22million.