Merry Hill, Stafford and Walsall Carpetright stores to close as company axes 300 jobs
Seven West Midland Carpetright stores are to close after the struggling retailer announced plans to axe 300 jobs.
The company has unveiled plans to shut another 81 shops - including at Merry Hill shopping centre, Stafford, Walsall and Lichfield - under a sweeping restructure which will see 300 job roles lost.
Stores in Stechford, Birmingham and Telford are also on the list.
The chain said that, overall, 92 sites had been earmarked for closure from the end of September, although 11 have already stopped trading, with the rent on another 113 set to be slashed under the company voluntary arrangement (CVA) proposals being put to landlords.
It said it hopes to relocate staff where possible.
The group – which employs nearly 2,700 staff in total at 409 sites – also confirmed an investor cash-call to raise around £60m through a rights issue to put the company on a firmer financial footing.
The details came as it revealed a "technical breach" of its banking arrangements, but the group said it was taking action to address this and ensure it is amended for the future.
Carpetright chief executive Wilf Walsh said: "These tough but necessary actions will enable us to address the burden of a legacy UK property estate consisting of too many poorly located stores on unsustainable rents, and are essential if we are to restore our profitability and deliver a successful turnaround.
"We will remain in close contact with all colleagues to keep them fully informed as we move through this process."
Carpetright said planned closures would not affect customers with all orders to be fulfilled either by the original store or a neighbouring Carpetright where necessary.
Shares in Carpetright tumbled more than 23 percent at one stage after details of the proposals and rights issue.
The firm said trading had remained "difficult" since its last update on March 1, with the group continuing to expect a small underlying loss for the year to April 28.
It said the CVA – which is a form of insolvency aimed at protecting a business from going bust by cutting its costs – will help it to "address the competitive threat from a position of strength".
Landlords will vote on the plans on April 26, while shareholders will have their say on April 30.
The rescue deal, which is being handled by Big Four accountancy firm Deloitte, marks another dark day for the sector, which has already seen thousands of jobs axed following the collapse of well-known names Toys R Us and Maplin.
High street retailers have been hit by a drop in consumer spending, soaring costs and the increasing threat of online competitors.
The British Property Federation praised Carpetright for taking early action to address its trading woes.
Stephanie Pollitt, assistant director of real estate policy at the BPF, said: "These situations are never easy as landlords need to take into consideration the impact on their investors, including those protecting pensioners' savings, as they vote on the CVA proposal."
She added: "Ultimately, it will be for individual landlords to decide how they will vote on the CVA, but the proposal has sought to find a solution that works for all parties."