Shares of Carpetright Decline After Report of Imminent Store Closures

David Wright via Wikimedia Commons

On Monday, the shares in Carpetright sharply declined with traders pointing to a report from last weekend that the retailer is considering closing some of its stores, as a response to heightening financial pressures.

Earlier this March, Carpetright disclosed that it was battling challenging trading conditions and that it anticipated its financial performance for the year to the end of April to be worse than what was previously expected.

At the time, Carpetright said that it predicts a small underlying pretax loss for the year and that the company was “proactively engaged in constructive discussions with its bank lenders in order to ensure it continues to comply with the terms of its prevailing bank facilities.”

The company also stated that it was studying a “range of options to accelerate the turnaround of the business and strengthen its balance sheet.”

Over the weekend, it was reported by The Telegraph that the firm was considering to close some shops as a part of a turnaround plan. 2018 has already seen Maplin and Toys R Us collapse into administration in the United Kingdom. Other high street names have slashed scores of jobs and shuttered some of their outlets in order to save costs.

Pressure is stemming from higher minimum wages, an increase in business rates, and a rise in inflation that was triggered by a drop in the value of the pound following the Brexit vote.

A Carpetright spokesperson refused to comment regarding the report.

The spokesperson stated: “As announced on 1 March, we are examining a range of options to accelerate the turnaround of the business and strengthen its balance sheet. This process is ongoing, and the group will update the market on these initiatives as required.”

Carpetright is the biggest floor coverings retailer of Britain. It has more than 400 stores in the United Kingdom and over 130 international outlets that are predominantly located in the Netherlands.