Carpetright close to collapse putting 1,800 jobs at risk

Carpetright is in danger of going out of business, which means that over 1,800 employees could lose their jobs.

The retailer has submitted a declaration of intent to appoint administrators as it seeks additional funding.

Consulting company PricewaterhouseCoopers (PwC) is being considered, but has not been officially selected, to manage the company's administration.

The company stated that it had started positive discussions with potential buyers and that its 272 stores would continue operating for the time being.

We will still process and ship orders, but unfortunately we will not be able to issue any refunds. However, we can offer alternative products or arrange for a quicker delivery if needed.

Kevin Barrett, the chief executive of Nestware Holdings, the parent company of Carpetright and various other retail chains, stated that the company's efforts to reorganize were negatively affected by a decline in April sales as a result of a cyber-attack.

As a result of this, the company is now in the process of seeking protection during the sale negotiations.

He mentioned that the top concern is to make sure that "the least amount of customers and colleagues are affected".

The company, one of the largest flooring sellers in the UK, has also been affected by a decrease in customer interest.

Stores that are selling expensive products have been struggling because consumers are prioritizing purchasing everyday necessities.

John Cullen, a partner and expert in insolvency at the business advisory firm Menzies, commented that the challenges Carpetright is experiencing highlight how tough retail trading conditions are currently. He also noted that the cyber-attack the company experienced seemed to be the final blow that led to their difficulties.

The company has been granted a 10-day grace period to search for a potential buyer.

It is familiar with tough times, as it went through a type of financial hardship six years ago in order to save money.

Back then, the company had to shut down 81 of its shops because it had a loss of more than £70m for the year.

The announcement of its expected downfall on Friday follows reports that the company had made itself available for purchase just a day prior.

Carpetright was established in 1988, with its initial store launching in Canning Town, located in east London. The company experienced many prosperous years, becoming a publicly traded company on the London Stock Exchange in June 1993. However, it was removed from the stock exchange in 2020.

Nowadays, it offers a wide range of products including flooring, mattresses, curtains, blinds, outdoor furniture, and fake grass.