Carpetright unveils losses amid store closure plan
Sales at the retailer dipped in the first half.
Troubled retailer Carpetright has unveiled stinging losses for a period in which it underwent a dramatic store closure programme.
For the 26 weeks to October 27, the group made a loss before tax of £11.7 million.
Underlying earnings swung to a loss of £1.7 million compared with a profit of £8.6 million this time last year.
Group revenue was down 15.7% at £191.1 million, with Carpetright saying sales in the first quarter had been affected by bad publicity around the brand and challenges in stock availability.
Like-for-like sales in the first quarter fell 16.8%, while second-quarter comparable sales were 8.9% lower.
Carpetright also said it was braced for a dip in consumer spending and confidence after Brexit, but that its restructuring plan meant it was “best placed in the floor coverings sector to deal with the challenges these headwinds might present”.
The firm gained approval for a company voluntary arrangement (CVA) in April, allowing it to close up to 81 under-performing sites.
Of these, 54 were shut in the period and another two are to close in the second half. Another 25 continue to trade without paying rent.
An additional 11 stores have been shut where the landlord has decided to take back the lease, with another nine closures expected in the second half.
Chief executive Wilf Walsh said: “This is a transitional year for Carpetright as we work through our restructuring plan.
“We remain on schedule and are confident that this activity is already starting to yield benefits.
“This is the first stage in returning the group to sustainable long-term profitability.”