United Carpets is conducting a store closure review in the face of “extremely challenging” market conditions.
The retailer has already closed a number of franchise stores and has resolved to push back its preliminary results for the year to March 31 to late August.
The retailer said it will review a number of stores in order to ascertain whether they can remain viable under the current franchise model.
United Carpets said the rationalisation of its store portfolio would be to meet the “more stringent criteria” to trade in these conditions and to “prevent an accumulation of poorly performing stores creating an unsustainable financial burden on the group”.
The retailer’s franchise network has found it difficult to meet their liabilities to creditors and the group.
United Carpets said it had pumped “considerable investment” into technology to provide footfall information and conversion rates to improve marketing effectiveness and retail performance.
The retailer said it had also made “wide reaching changes to the retail operations management structure and substantial ongoing financial support from the group”.
The company said: “The difficult market environment, uncertainty surrounding the economic recovery and the outlook for Europe that was noted at the time of the company’s interim announcement has continued.
“As a consequence, apart from occasional, short-lived, promotion-led activity, trading for retailers generally and for “big ticket” retailers in particular has been extremely challenging.
“As a consequence, since the year end it has been necessary to terminate a number of franchises. This is likely to have a detrimental affect on the performance of the group as it is proving increasingly challenging in the current environment to turnaround failing stores.”