Struggling textiles group posts steep losses despite CVA

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Carpetright has reported steep annual losses despite agreeing to cost-cutting measures earlier this year.

The textiles group entered into a Company Voluntary Arrangement (CVA) in April in hope that it could turn itself around.

A CVA is a legally binding agreement with a company’s creditors to allow a proportion of its debts to be paid back over time.

As part of the agreement, around 81 stores were shut, rents were renegotiated and around £65 million was raised from existing shareholders.

But Carpetright’s latest financial report spells trouble for the group with further losses and falling sales.

For the year to 28 April, the group posted a statutory loss of £70.5 million, while like-for-like sales in the UK fell by 3.6 per cent.

Discounting one-off costs, such as restructuring expenses, the store made a loss of around £8.7 million.

Chief executive Wilf Walsh said: “This will be a transitional year for the group as we work through our recovery plan.

“Completing the turnaround will take time and the road ahead remains a challenging one – but we now have the resources to fully fund our revised business plan.

“We do believe that we now have a bedrock in place of a largely right sized and right rented retail estate supported by plans to develop a compelling digital offer that will see us grow profitable market share over the next few years.”