Cash-strapped retailer Carpetright that deals in floor coverings has reported a sharp increase in its losses in half-yearly results from £0.6m earlier to 11.7m. The store also reported a decline in sales by 12.7%. However, the firm maintains that there has been a marked improvement between the 2 quarters. The firm’s net debt came down to £12.4m from £53m reported earlier.
Earlier in 2018, the company had drawn out a rescue plan where it planned to shut 81 stores. As of now, the company has already closed 65 stores.
Wilf Walsh, the chief executive of Carpetright stated that it had been a transitional year as the company implemented the rescue plan. The company is right on schedule, which enhances the confidence that the rescue plan will start showing results. We have taken the first step to turn around the group to bring long term profits, he said.
Investors too were positive about the plan and the shares jumped by 4% on positive signs.
Market.com’s Neil Wilson stated that Carpetright showed positive results and the company is on the right track as the store closure would yield annual savings of £19m. Furthermore, the average lease of the store is lessened to 3.5yrs and over 50% of these will break in 2 years and that’s good news for the investors.
The company has entered into a CVA (Company Voluntary Arrangement) with the creditors earlier in April this year and would be raising £65m from shareholders.
Carpetright has been facing stiff competition from Tapi, however, Mr. Wilson maintained that Carpetright was favorably placed as it enjoyed higher market share and better brand recognition.
Carpetright is not the only one facing troubled times as several other businesses on High Street have met the same fate. Some of the prominent names include Mothercare, Poundworld, Debenhams, Maplin, House of Frasers, Toys R Us to name a few.