Shares in United Carpets have been suspended as the retailer works out costs of multiple store closures.
The retailer has reviewed its 85 stores and has closed six stores with a further 17 franchised stores to be either taken back into the group or refranchised. A further eight stores are expected to close over the next few weeks although the retailer said that more may be necessary.
United Carpets’ franchise stores have found trading “very challenging” which has resulted in a situation which is “increasingly unsatisfactory for the company”.
It has also started to negotiate with landlords regarding a “number of other stores” to try to agree rent reductions.
The impact of the closures is being quantified. A £1m non-cash provision will be needed, however the retailer said depending on negotiations further “potentially substantial” provisions may be required.
United Carpets has extended its current accounting reference day from March 31 to September 30 in order to give a representative picture of its ongoing operations.
It said: “Whilst the board is disappointed by the need to take these actions, the directors continue to believe that, with appropriately adjusted central costs, the core of locations that will continue following the completion of the review will be able to operate successfully on an ongoing basis.”