Carpetright has overcome a major hurdle in its bid to launch a company voluntary arrangement (CVA) after its creditors voted in favour of the proposals.
The retailer said “a majority of more than 75%” gave the green light to the plan.
Carpetright’s shareholders will now face a separate vote on the CVA on Monday April 30.
Chief executive Wilf Walsh said: “Addressing our legacy property issues to reduce our fixed costs to sustainable levels is critical to securing Carpetright’s recovery.
“Receipt of creditor approval for the CVA proposal will enable us to take tough but necessary action to establish a right-sized estate of stores on economic rents, which is essential to restoring our profitability.
“Our focus now shifts to the forthcoming shareholder vote and to our preparations for the proposed equity financing, which will recapitalise the business and enable Carpetright to address the competitive threat from a position of strength.”
As reported by Retail Week earlier this month, Carpetright plans to shutter 92 of its 418 stores under the terms of the CVA – a move that is expected to result in 300 job losses across stores and head-office functions.
Another 113 stores will be subject to reduced rents and revised lease terms under the retailer’s proposals.
Carpetright also plans to raise £60m through an equity capital raising next month, the proceeds of which will be used to fund its ongoing strategy, reduce indebtedness and cover costs associated with the CVA.
The retailer drafted in experts from Deloitte in March after it was forced to issue three profit warnings in as many months.
It blamed declines in footfall and consumer confidence for its trading troubles.
Walsh has also taken a swipe at Carpetright’s founder and former boss Lord Harris, whom he blamed for its property issues.
He said: “The aggressive store opening strategy pursued by the company’s previous leadership has left Carpetright burdened with an oversized property estate consisting of too many poorly located stores on rents which are simply unsustainable.”
Lord Harris left the business in 2014 and went on to set up rival chain Tapi Carpets alongside his son, Martin.
Tapi now has 95 stores, the majority of which are in close proximity to Carpetright shops.