Carpetright plots shake-up in latest profit alert

Carpetright has issued its second profit warning since Christmas and raised the prospect of potential store closures and job cuts amid the crisis facing many UK retailers.

The specialist carpet and floor coverings retailer admitted it now expected to report a “small” loss for the year to 28 April because UK like for like sales, while improving, remained negative and below expectations.

Its statement said: “Trading conditions in the weeks since the group last updated the market on 19 January 2018 have remained difficult, characterised by continued weak consumer confidence.”

It added: “The group is therefore 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 bank lenders have indicated that they currently remain fully supportive.

“In addition to the discussion with its lenders, the group is examining a range of options to accelerate the turnaround of the business and strengthen its balance sheet.

“This process remains at an early stage and the Group will update the market on these initiatives as required.”

While it did not specify the measures it was considering, the company is understood to have a string of under-performing stores among its portfolio of 409 outlets in the UK.

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They are also all believed to be rented premises – with onerous leases blamed by many chains for contributing to high costs at a time when weak consumer confidence has hit sales.

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