Carpetright: retailer files for administration today, sale explained - are stores near me at risk?

• Carpetright has filed a notice to appoint administrators, putting 3,000 jobs at risk
• The Times reported that the company had been put up for sale yesterday (11 July)
• Advisers at PwC have reportedly concluded there is no viable option for a solvent sale due to declining sales
• The retailer will continue trading for up to 10 days while seeking a rescue buyer
• Potential store closures may occur during the sales process, though all stores remain open for now
• Last month, the company announced plans to cut over 25% of its head office staff to streamline costs

It’s being reported that Carpetright will file a notice to appoint administrators today (12 July), potentially putting 3,000 jobs at risk.

It is understood that experts from PwC are set to be appointed as part of the process, who will seek to find emergency funding or a rescue buyer for the troubled business.

Once a notice of intent to appoint administrators is filed, it gives companies around 10 days in which it can attempt to avoid insolvency.

Yesterday (11 July), The Times reported that Carpetright had been put up for sale, but it has since emerged that the situation is more severe. It is not yet known if any potential bidders have shown interest in buying the retailer.

Sources said that store closures could occur during the sales process. For now, Carpetright stores remain open, and its 3,000 employees are still in place.

Sources also said that any potential sale of the chain could be completed through a pre-pack deal or a company voluntary arrangement, which could result in losses for customers, suppliers, subcontractors, and landlords.

Carpetright, which operates around 300 stores across the UK, has been severely affected by a reduction in consumer spending. Sales of furniture and homeware have declined industry-wide as consumers delay major purchases and focus on essential bills.

Earlier this year, Carpetright enlisted restructuring experts Teneo to explore cost-cutting measures. Last month, the retailer announced plans to cut more than 25% of its head office staff, putting around 70 jobs at risk, as part of efforts to streamline operations.

The job cuts in IT, warehousing and distribution are expected to reduce the company's cost base by approximately £22 million. According to its website, the chain currently has 274 stores across the UK and is one of the country's largest floor-covering retailers.

In April, the retailer's finances were impacted by a cyberattack that left it unable to trade online and in-store for almost a week.

Carpetright was founded in 1988 in the UK by Lord Harris of Peckham, and was initially successful through its strong brand reputation, wide range of flooring products, competitive pricing, and a significant presence with numerous stores across the country.

What are your thoughts on Carpetright's situation? Do you think the retailer can recover from this crisis? Share your opinions and insights in the comments section.