Carpetright in talks with lenders after issuing profit warning

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Carpetright profit warning

Carpetright has started talks with its lenders after revealing that ongoing challenges in market conditions means it now expects to report a small full year loss.

In its second profit warning in less than two months, the retailer said trading has remained under pressure due to weak consumer confidence.

It also also said that like-for-like sales in both the UK and the rest of Europe was still falling, despite a small improvement since its last trading update in January.

As a result, Carpetright has kicked off talks with its lenders to ensure it does not breach the terms of its bank loans.

It also said it was looking at options to speed up a trading turnaround, although plans were at an “early stage”.

“Although the important Easter trading period is still to come, UK like-for-like sales remain below management expectations and the group now expects to report a small underlying pre-tax loss for the year ending 28 April 2018,” the retailer said in a statement.

“The group is therefore proactively engaged in constructive discussions with its bank lenders in order to ensure it continues to comply with the terms of its prevailing bank facilities.

“The bank lenders have indicated that they currently remain fully supportive.”

Carpetright shares took a hit in January when it warned over profits and said like-for-like UK sales had fallen 3.6 per cent during its Christmas trading period.

Its latest profit warning comes in a dark week for retail after Toys R Us UK and Maplin both fell into administration yesterday, plunging around 5500 jobs into uncertainty.

Carpetright has 416 stores in the UK and 552 worldwide.

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