Major homeware brand on brink of collapse could be SAVED as 272 stores at risk of closing their doors forever
A MAJOR homeware brand on the brink of collapse could be saved as 272 outlets are at risk of closing for good.
Struggling Carpetright could be snapped up by its largest competitor Tapi Carpets as the two move closer to securing a deal.
Should an agreement be reached it would mean hundreds of stores and jobs would be saved.
Tapi Carpets is thought to be in pole position to acquire the retailer which put itself up for sale last week, having made a formal bid to buy the Carpetright brand name and a number of its stores.
Tapi, which was founded in 2014 by Martin Harris, the son of Carpetright founder Lord Harris of Peckham, who is also a shareholder, is understood to not want to acquire the head office in Purfleet, Essex.
Any sale is likely to be delivered via a pre-pack administration, which could lead to some of its shops being permanently shut and jobs scrapped, The Times reports.
Administrators at PwC were put on standby on Friday by Carpetright as it sought a “period of protection” as it searched to secure additional investment.
It is believed the executives at the retailer were reluctant to approach Tapi about a deal over fears it could gain access to sensitive trading information.
Carpetright are also understood to want a quick sale and are concerned its competitor would have to go through competition clearance to get the green light for the sale.
Carpetright’s ultimate owner, Meditor, a British hedge fund, has ruled out trying to buy back the business or putting any more money in.
Meditor owns Nestware Holdings, which also owns The Floor Room.
Tapi Carpets is understood to have the best chance of clinching a deal.
However, sources have previously stressed Tapi would not be interested in acquiring all of Carpetright’s stores or its head office.
This type of deal would inevitably still lead to hundreds of job losses from its 1,852 workforce.
Industry sources reckon that Tapi Carpets could argue Carpetright is a “failing firm”.
This would allow it to swerve competition concerns by arguing that unless it bought the business, Carpetright would be forced out of the market entirely.
Mr Harris is no longer at Tapi Carpets and is not interested in making his own bid.
Retailers closing stores in 2024
RETAILERS have been hit by soaring inflation and a downturn in spending due to the cost of living crisis.
High energy costs and a move to shopping online are also taking their toll.
Some high street shops have closed due to businesses opening up in different locations such as larger retail parks.
Shops may also close due to a number of other reasons, such as rising rents.
We explain which retailers are closing in 2024:
- Argos – The brand announced plans to close 100 standalone UK branches last year as it looks to move away from the high street and focus on expanding its presence in supermarkets.
- B&Q – The chain has over 300 shops across the UK, with two stores closing this year due to leases not being renewed. It has plans to open more in 2024 too.
- Boots – The health and beauty chain announced that it would be closing 300 stores last July. Closures are ongoing and this will see the retailer’s estate reduced from 2,200 to 1,900 shops.
- Clintons – Clintons mulled plans to close 38 shops in a bid to avoid insolvency late last year. We’ve listed the stores affected.
- Costa Coffee – The caffeine giant has around 2,000 sites nationwide, so chances are you’ll have one near you. The chain has shut the doors to dozens of its sites recently. We’ve revealed which stores are due to close this year.
- Iceland – The supermarket has more than 900 stores but closed nearly two dozen sites in 2023, and more selected shops are due to shut.
- Lidl – The supermarket, which has 950 stores, is changing up shop locations, which has meant that some stores have to close. But the retailer is also looking to open 12 new supermarkets.
- M&S – M&S, which runs 405 stores across the country, has been closing a string of branches across the country in a blow for shoppers. It’s not all bad news, though, because the chain also has big plans to open dozens of new shops.
- Trespass – The firm announced in July last year that it was closing six branches, but more are on the way.
- WHSmith – The retail giant, which runs over 1,100 stores, has shut eight stores since March 2023, but more are coming.
What else is happening to homeware chains?
The news follows a tricky time for home improvement chains, both large and small.
It comes as shoppers have been cutting back on spending following the pandemic.
Plus the recent turmoil in the housing market has meant that homeowners aren’t as focused on DIY projects as they once were.
In spring, Kingfisher, which owns both B&Q and Screwfix, revealed annual profits slumped by more than a quarter.
The company reported a 25.1% drop in underlying pre-tax profits to £568million for the year to January 31, 2024.
Window and door specialist Everest called in administrators in April leaving customers in the dark over their orders
Last year, the group had previously cautioned profits would slip after a 36% drop in pre-tax profits from £1billion to £611million in the 12 months to January 2023.
Rival Wickes, also reported a 31% fall in profits to £52million on flat revenues of £1.55billion for 2023.
Windows and doors company Safestyle collapsed into administration in October last year.
The company has a manufacturing site in Wombwell, near Barnsley and 42 sales branches and depots across the country.
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