Carpetright collapsed in debts worth almost £345m. More than half are owed by customers, suppliers and landlords, as well as other unsecured creditors.
Administrators from PricewaterhouseCoopers, who were called in to the retailer this month, said unsecured creditors, including the technology group Microsoft and the carpet suppliers Condor and Betap, were owed £213m and that no more than £600,000 of that was likely to be repaid.
In the report that outlined its proposals to creditors, PwC didn’t put a number on the amount due to customers who paid for flooring products but had not received them.
Employees owe at least £2.2m to the UK tax authorities and £9.2m to UK tax authorities. The administrators said that these amounts were likely to be reimbursed.
Nestware Holdings owed £120m to Carpetright, which was the owner when Carpetright entered administration. Administrators said they were unsure how much would be paid. Nestware is owned and managed by Meditor – a British hedge funds headed by asset manager Talal Shakerchi.
Carpetright is expected to lose more than 1,500 staff positions after a deal with its rival Tapi Carpets & Floors. The retailer was only able to save a fifth (300) of its stores.
The multimillion-pound agreement finalised last weekend includes 54 stores, but does not include Carpetright’s headquarters in Purfleet (Essex), and 219 more shops will be closing. Although 1,000 jobs were lost with immediate effect, a few workers were retained for a brief period of time to help transition the business to new owners.
PwC is looking for a buyer of Carpetright since it filed an notice on 12 July announcing its intention to appoint a administrator.
The trend was further evidenced on Wednesday when DIY retailer Wickes announced a nearly 4% drop in underlying sales in the six-month period ending 29 June. This decline was primarily due to a 18.3% plunge in sales of installation and design services for kitchens and bathroom at established stores.
The group noted that the retail sales were also affected by households choosing smaller, cheaper projects.
Carpetright was also hit by the shift away from fitted flooring, increased competition, and a cyber attack in April that left it unable trade for one week.
According to the administrators’ report, Carpetright had to apply for administration when HM Revenue and Customs (HMRC) threatened to issue a petition of winding up for failure to pay VAT and national insurance.
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