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Carpetright shares fall on trading fears

By Simon Penfold | Business | Published:

Shares in Carpetright have plunged on reports the struggling retailer may close stores and axe jobs as it pieces together a rescue plan.

It is understood the group could go down the route of a company voluntary arrangement, which would allow to it to shut loss-making stores and secure deep discounts on rental costs.

Carpetright said it was exploring "a range of options" to reboot the business and a final decision had not been made.

The company has 409 UK stores including branches in Dudley, Wolverhampton, Walsall, Kidderminster, Oldbury, Stafford and two in Cannock

The prospect of a CVA – first reported at the weekend – sent shares tumbling more than 14 per cent in trading on the London Stock Exchange on Monday.

Such a move would see Carpetright join the likes of fashion retailer New Look and restaurant chains Byron, Prezzo and Jamie's Italian, which have all embarked on CVAs since the start of the year.

It was also heap further misery on Britain's battered high street following the collapse of Toys R Us and Maplin, which has affected 5,000 jobs.

Carpetright revealed earlier this month that it was set to swing to a full-year loss and had started talks with its lenders to ensure it does not breach the terms of its bank loans.

It also confronted by a share price crash in January when it warned over profits and said like-for-like UK sales had fallen 3.6% during the crucial Christmas trading period.

A spokesman for Carpetright said: "As announced on March 1 we are examining a range of options to accelerate the turnaround of the business and strengthen its balance sheet.

"This process is ongoing and the group will update the market on these initiatives as required."

Simon Penfold

By Simon Penfold
Business Editor - @SPenfold_star

Business Editor based at the Express & Star's head office in Wolverhampton, looking for stories big & small.

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