Carpetright’s biggest rival Tapi has snapped up the chain’s brand and more than a fifth of its stores out of administration.
The flooring retailer has acquired Carpetright’s intellectual property, two warehouses and 54 of its stores, which Tapi said will save 308 jobs and “expand [the business] into a number of areas we don’t currently serve”.
However, the deal will result in 1,018 job losses across Carpetright’s head office in Purfleet and its remaining 218 stores across the UK.
Administarors at PwC said it will retain employees at the company’s head office for a short time to support in winding down operations.
Tapi, which was founded in 2014 by Martin Harris, the son of Carpetright founder Lord Harris of Peckham – who is also a shareholder, said it will temporarily close the 54 stores for a couple of days whilst it updates the ordering, telephone lines and email system, which will all be out of action until they re-open.
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The retailer said that saving the entire business was “unviable” as Carpetright had been materially loss making for a number of years and had racked up “significant debt”. It added it had been mindful of how the Competition and Markets Authority (CMA) would view a larger deal.
Tapi managing director Jeevan Karir said: “Our goal, initially, was to try to save all of Carpetright. However, as we looked into the details of the situation, we quickly established that saving the entire business was unviable.
“The business has been materially loss making for a number of years and it has significant debt held by the owner.
“We then turned ourselves to trying to save a number of stores whilst being mindful of how the Competition authorities would look at any deal. So, we arrived at 54 stores and two supporting warehouses. All of which are exceptional and that we’d be proud to have as part of the Tapi family.”
PwC joint administrator Zelf Hussain added: “Carpetright has fallen victim to challenges facing many retailers, especially those selling big ticket items. A mixture of factors, including a big reduction in consumer spending due to cost of living pressures, lower home sales and a debilitating cyber attack made it impossible for the business to continue in its current form.
“The sale of some stores and the brand to Tapi has allowed over 300 jobs to be saved, and gives the Carpetright brand the chance to continue and flourish under its new ownership.
“However, it is deeply saddening that for the remainder of the workforce there will be redundancies. We are committed to helping those affected and will make sure redundancy claims are processed as quickly as possible. In collaboration with Tapi, we will assist in efforts to help individuals find new jobs elsewhere.
“We know this is an uncertain time for many of those affected and want to thank all the staff for the support they have given the company in these difficult circumstances.”
Carpetright hired PwC to find a buyer for it earlier this month as it struggled with increased competition and a slowdown in demand.
The flooring specialist filed a notice of intention to appoint the firm as administrators the same week as it sought a “period of protection” whilst it works to finalise additional investment to secure the long term future of the company.
Tapi is understood to have been the only company to submit an offer that involved rescuing both jobs and stores – other options included liquidating the business entirely.
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