Carpetright today said it was back on track for “sustainable prosperity” after a year in which it used a CVA (company voluntary agreement) to reduce the size of its store estate. It is one of a number of retailers, from New Look to Mothercare, that has closed “legacy” stores in the light of a consumer shift towards online retailing.
By the end of its financial year in April, the carpets-to-beds retailer, a Top250 retailer in IRUK Top500 research, had 334 UK stores with an average store lease length of four years, down from 410 a year earlier. Over the course of the year, 80 UK stores were closed, and four were opened. By year-end, 241 were trading under its new format. It also had 132 European stores, in the Netherlands, Belgium and the Republic of Ireland.
Carpetright today reported revenues of £386.4m in the year to April 27, down by 13.4% on the same time last year. In the “challenging” first-half alone, like-for-like revenues fell by 12.7% as the retailer closed stores. In the UK market alone, sales of £301m were 17% down on last time. Underlying earnings before interest, tax and asset write downs came in at £2.9m, but costs including the group’s turnaround programme meant Carpetright reported a £24.8m pre-tax loss, down from £69.8m a year earlier.
Carpetright chief executive Wilf Walsh said the year had been a transitional one for the business, “as we took tough but necessary action to address our legacy property issues and restructure the UK store estate. This difficult task was carried out against the backdrop of a challenging trading environment but was essential to put the business back on the path to sustainable profitability.”
The business, he said, was now focusing on a simple strategy, around who it is, what it sells, how it sells and where it sells. It describes the latter as “an improved store portfolio supported by an outstanding digital offer.”
Supplies were disrupted immediately following the CVA, said Carpetright, but that was short-lived.
Image courtesy of Carpetright
