Carpetright’s rival is the frontrunner in the race to purchase the flooring retailer.
Tapi, a company founded by the members of the Carpetright family, has submitted a formal offer to buy the brand, intellectual property and portfolio of stores. The company is believed not to be interested in buying the head office of Carpetright, located in Purfleet.
Pre-pack administration is the most likely way to complete a sale, and this could lead to several hundred job losses or store closures. This type of restructuring leaves many customers, suppliers and subcontractors out of pocket.
Carpetright, a company that operates 272 stores in the UK, filed at the High Court a notice last week of its intention to appoint PwC an administrator. The accounting group was already working to find a buyer.
Kingfisher (owner of Screwfix and B&Q) and other financial institutions such as Alteri, Hilco, and Gordon Brothers have been approached, but they did not make a bid.
The Floor Room owned by Nestware Holdings, and in partnership with John Lewis. It is reported that they considered purchasing parts of the company. The deal would have been controversial because Nestware is owned and managed by Meditor. This British hedge fund is headed by Talal, 60, an ex-Old Mutual banker, poker player, and owner of Carpetright.
Carpetright’s executives reportedly did not want to contact Tapi to discuss a possible sale because they were worried that the rival retailer could gain access to sensitive information about trading.
In 2015, Tapi was established by Martin Harris, 55. His father, Lord Harris of Peckham is the “carpet-king” who founded Carpetright. The name comes from Tapis – the French word carpet. Lord Harris is still on the board of directors, even though Martin Harris left the company.
Harris stated that at the launch of Tapi he wanted to appeal to a more wealthy shopper compared with his previous family business. He opened dozens stores right on Carpetright’s doorstep. About 175 stores are operated by the company.
Carpetright’s demise was largely due to the intense competition of Tapi, which began as a small shop in East London in 1988. Carpetright has also been affected by the shift in consumer preference from carpets to hardwood flooring, as well as a decrease in physical retail due to online shopping. Carpetright was affected by a cyberattack in April, which left them unable to conduct business from their stores for nearly a week. Hackers used malware to gain access to the company’s head office.
Sources claim that its revenue has dropped from £493.2m in 2020 to £200m in the last year. This compares to £372.6m in the 14-month period leading up to January 1, 2022 and £493.2m in 2010. It is believed that the chain has more than £100,000,000 in external debt.
Shakerchi’s British hedge fund Meditor took over Carpetright in 2020. It had acquired almost 30% of the shares of the company and more than £40million of its debts a year earlier.
Carpetright’s collapse would be the second time it has had to undergo a restructuring. In 2018, it was forced to use a voluntary company agreement to close underperforming stores and to reduce rents at other locations.
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