Carpetright (LON: CPR) has warned that it expects this year’s full years losses to be double that previously expected.
Britain’s biggest carpet retailer has estimated losses of between £7 million – £9 million, compared with a profit of £14.4 million last year.
The struggling floor covering chain has issued four profit warnings in the past five months as the retailer has been hit by the weaker consumer confidence and slowing down of the housing market.
Whilst the firm expected £13 million in profits at the start of the year, one month ago Carpetright forecasted a “small loss”, estimated by house broker Peel Hunt at £4.3 million.
Under a company voluntary arrangement, the group plans to shut 92 stores which could result in the loss of 300 jobs.
“The CVA proposal will enable us to take the tough but necessary actions needed to restore our profitability. Having now received approval from both shareholders and creditors we will press ahead with our plans for the proposed equity financing to recapitalise the business and enable Carpetright to address the competitive threat from a position of strength,” said Wilf Walsh, the Carpetright chief executive.
Walsh maintained that he is “committed to the project”. “I don’t think now would be the time to bail,” he added.
Carpetright is not the only retailer struggling in the current climate. The group’s latest profit warning comes just weeks after fashion retailer New Look won approval for a CVA that will lead to the closure of up to 60 stores and rent reductions on many more.
Carpetright shares were down four percent in afternoon trading.