The Carpetright brand and 54 of the flooring retailer’s stores are being bought by its rival Tapi Carpets and Floors in a deal that will save 300 jobs.
The multimillion-pound deal, which is expected to be finalised on Monday, does not include Carpetright’s head office in Purfleet, Essex, or 220 further shops, and will result in about 1,000 job losses.
The advisory firm PricewaterhouseCoopers has been looking for a buyer for Carpetright after it filed a notice of intention to appoint an administrator earlier in July.
Tapi has been a bitter rival to Carpetright since it was co-founded in 2015 by Martin Harris, the son of “carpet king” Lord Harris of Peckham. Harris launched Tapi a year after he and his father stepped down as directors of Carpetright, which Lord Harris founded in 1988.
Harris left Tapi earlier this year, while Lord Harris remains an investor and adviser to the business.
The acquisition of Carpetright would enable Tapi to expand into a number of new areas, the company said. Lord Harris continues to have a role on the board of Tapi, which he co-owns with about 1,000 investors, the largest of which is the executive chair, Will Barker of the US investment firm Camelot Capital Partners.
Tapi, which has 170 stores, said in a statement that it was “desperately sad not to have been able to save more of the business and customer orders”.
Jeevan Karir, the managing director of Tapi, added: “Our goal, initially, was to try to save all of Carpetright. However, as we looked into the details of the situation, we quickly established that saving the entire business was unviable. The business has been materially loss making for a number of years and it has significant debt held by the owner.”
The group said another reason it had not taken on more Carpetright stores was because it was “mindful of how the Competition and Markets Authority may view a larger deal”.
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Sales at Carpetright, which was once FTSE-listed , was bought and taken private in 2019 by Meditor, the British hedge fund headed by the poker player Talal Shakerchi. Sales are understood to have fallen more than 45%, to £200m, in the past year, while losses have mounted to more than £25m in recent years along with more than £150m in external debt.
Kevin Barrett, the chief executive of Nestware Holdings, the Meditor-controlled group that ran Carpetright, said: “We have tried everything to turn Carpetright around and I’m truly sorry that we were unable to save more jobs. The deal will not affect Carpetright in Europe or other brands within Nestware Holdings including Keswick and Trade Choice.
“The Floor Room will continue to trade and serve customers via concessions at John Lewis and we will be working hard to secure job opportunities across these businesses to support Carpetright staff wherever we can.”