Carpetright rival buys 54 shops in rescue deal but more than 1,500 jobs will go

Over 1,500 positions will be eliminated at Carpetright as Tapi Carpets & Floors steps in to rescue the struggling retailer. Unfortunately, only a small fraction of its stores and 300 jobs will be saved in the deal.

The big-money agreement, completed on Monday, involves 54 stores but does not include Carpetright's main office in Purfleet, Essex. Instead, 219 shops will be shutting down.

The financial consulting company PricewaterhouseCoopers (PwC) has been searching for a purchaser for Carpetright since it declared its intent to appoint an administrator in early July.

The article mentioned that 1,018 positions will be eliminated right away under the pre-pack administration arrangement. Additionally, 580 more jobs, mainly at the company's main office, are anticipated to be cut once the transition to Tapi is finalized.

People all over the country will also be let down, as PwC mentioned that orders made with stores not covered by the agreement will not be completed. They recommended that impacted customers reach out to their credit card company to see if they can get their money back.

Zelf Hussain, who is helping to manage the company as it goes through business difficulties, explained that Carpetright is facing similar problems to many other shops, especially those that sell expensive products.

He mentioned that additional reasons, such as a significant decrease in consumer spending because of economic strains, decreased home sales, and a harmful cyber-attack in April, made it unfeasible for the business to operate as it was.

Tapi and Carpetright have been fierce competitors ever since it was established in 2015 by Martin Harris, the son of the renowned carpet mogul Lord Harris of Peckham. Harris created Tapi just a year after he and his father resigned as directors of Carpetright, a company founded by Lord Harris in 1988.

Martin Harris departed from Tapi earlier this year, whereas Lord Harris still retains a role as an investor and consultant for the company.

Tapi announced that purchasing Carpetright would allow them to grow into different regions. Lord Harris remains involved with Tapi's board, along with approximately 1,000 investors. The main investor is executive chair Will Barker from the American investment company Camelot Capital Partners.

Tapi, with a total of 170 stores, expressed deep sadness in a statement about not being able to preserve more of the company and customer orders.

Jeevan Karir, the head of Tapi, said: "At first, we wanted to rescue Carpetright completely. But after investigating further, we realized that saving the whole company was not possible. Carpetright has been losing money for a long time and the owner has a lot of debt."

The team mentioned that they hadn't acquired additional Carpetright stores because they were concerned about how the Competition and Markets Authority might perceive a bigger transaction.

The company Carpetright used to be part of the FTSE stock market index but was purchased and made private by Meditor, a British hedge fund led by the poker player Talal Shakerchi, in 2019. It is reported that sales have dropped by over 45% to £200m in the last year, while losses have increased to over £25m in recent years, along with over £150m in debt to external creditors.

Kevin Barrett, the CEO of Nestware Holdings, which is controlled by Meditor and operates Carpetright, stated: "We have exhausted all efforts to revive Carpetright and I deeply apologize that we couldn't preserve more jobs. The agreement will have no impact on Carpetright in Europe or other brands under Nestware Holdings, such as Keswick and Trade Choice.

The Floor Room will keep operating and helping customers through concessions at John Lewis. We are committed to finding job opportunities within these businesses in order to assist Carpetright employees as much as possible.