United Carpets stable after pre-pack
UNITED Carpets’ shares were restored to trading on the stock market this morning after being suspended after the pre-pack administration of its main trading business.
In October, the stock market-listed chain put United Carpets (Northern) into administration to escape onerous leases from its landlords. The group then immediately bought its 72 stores, two warehouses in Doncaster and Derbyshire and most of its assets back from administrators Begbies Traynor.
Bramley-based United now operates from 66 stores, of which 15 are owned and 51 are franchised and the bed and carpet retailer says it is now has a more stable footing
“The board believes that as a result of the actions taken since June 2012, the group is in a better position to tackle what remains a very challenging marketplace,” said chairman Peter Cowgill.
United said without rent reductions, a number of its stores would have been unable to continue trading. It had been propping up franchised stores, which it realised was “unsustainable”.
United said the pre-pack secured “more favourable terms” with landlords. Negotiations are ongoing, but are “expected to enable the majority of franchises to trade successfully”.
Terms have been agreed with two-thirds of stores, including lower rents, shorter lease periods, break clauses and axing of repair obligations.
The company posted pre-tax losses of £2.6m for the 18-month period to October 2012, with £3m of exceptional items. Like-for-like sales were down 1%, with flooring up 0.2% and bed sales down 13.7%.
The group said trading since then has continued to be “very challenging”, with competition, snow, negative perceptions from the pre-pack and lower marketing driving underlying sales down 11.1% in the period.
