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Carpetright makes hard floors central to recovery after £60mln share raise

Carpetright’s rescue package also includes the closure of 92 stores and a £15mln loan
Carpets are out and hard floors are in

Carpetright PLC (LON:CPR) is to make hard flooring a major part of its recovery plan.

The embattled retailer is targeting annualised like-for-like sales growth for hard flooring products of 14% over the next three financial years alongside an acceleration of the store refurbishment programme.

READ: Carpetright to press ahead with restructuring plans as it secures £15mln loan from largest shareholder

A previously flagged share placing to raise £60mln was confirmed today, a big chunk of which will be used to implement the new strategy.

Carpetright’s rescue package includes the closure of 92 stores and a £15mln loan from major shareholder Meditor Capital. Shares were placed at 28p.

The placing and accompanying open offer depend on the sign-off on a company voluntary arrangement with its landlords. Some £6mln of the money will pay for the costs of implementing the CVA.

A further £12.5mln will repay Meditor, while the remainder will cover the rejuvenation programme.

Carpetright has earmarked £14.2mln for store refurbishments, while cost savings from the CVA are forecast in the order of £19mln, though sales will also fall due to the fewer number of stores.

Wilf Walsh, chief executive, said he was delighted with the support of shareholders, which will enable the remaining stores estate to be refurbished and modernised and the digital platform to be upgraded.

Stores that have been refurbished are seeing 9% better like-for-like sales than the other stores.

Carpetright shares rose 8% to 36p.

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