Carpetright 'could close stores' amid insolvency concerns

High street carpet giant Carpetright has revealed it could cut jobs and close stores as it considers the possibility of insolvency.

The group, which currently has 409 UK stores, has revealed it's exploring a "range of options" including a company voluntary arrangement (CVA), a form of insolvency that could allow the business to close any shops making losses and benefit from discounts on rental costs.

Carpetright revealed in March it is set to report to a full-year loss and will begin talks with lenders imminently to ensure the company does not breach the terms of its funding.

Since confirming its precarious position, Carpetright has seen the value of its shares fall more than 10 per cent on the London Stock Exchange. This blow follows a share price crash in January, when investors were warned over a fall in UK Christmas sales of 3.6 per cent.

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

As Carpetright approaches the point of insolvency it risks joining the likes of fashion retailer New Look and restaurant chains Prezzo and Jamie's Italian, all of which have taken the route of a CVA already this year.

Similarly, the news follows the collapse of fellow retailers Toys R Us and Maplin, both of which have succumbed to the waning success of the high street, affecting more than 5,000 jobs across the country.

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