Carpetright PLC (LON:CPR) has closed over 60 of its underperforming stores this year as it continued its restructuring programme following a near-collapse earlier in the year.
The flooring retailer said in an update for the 26 weeks ended 27 October that it had closed 67 underperforming stores, with a further 6 expected to be shuttered before the end of the year.
READ: Bad press and warm weather dent sales at start of ‘transitional’ year for Carpetright
The firm added that like-for-like performance had “remained negative” in the second half of the period, however, the trend was improving as the restructuring began to take effect, with trading performance in the rest of Europe (The Netherlands, Belgium and the Republic of Ireland) slightly ahead of last year.
The company said it remained confident in achieving £19mln in annualised benefits.
Wilf Walsh, chief executive of Carpetright, said the restructuring plan was “firmly on track” and had started to yield benefits as the firm created “a right-sized and well-located portfolio of stores on sustainable rents”.
Modernisation
He added that the company would continue to modernise its estate and invest in its digital capability.
In June, Carpetright began to implement its turnaround plan after raising £60mln from investors.
The plan is to close 92 of its worst-performing stores, slash the rent on the remaining 113 sites and cut 300 jobs – actions which Walsh said were essential if the company was to “restore our profitability and deliver a successful turnaround”.
In a separate announcement, the company said non-executive director Andrew Page was to stand down from the board on 31 December to pursue other commitments, and a search was underway for a successor.
In a note to clients, analysts at City broker Shore Capital said there was “a long road ahead” for Carpetright due to the underlying economic conditions and the time needed to reverse “adverse consumer perception” of the brand following the issues earlier in the year.
However, the broker added that the company was now “more in charge of its own destiny” given it had the capital to invest and a lower fixed cost base.
In early trading Thursday, Carpetright shares were steady around 18.9p.