Hundreds of Carpetright stores are at risk of closure as part of a proposed rescue deal by the troubled retailer’s founding family.
Tapi, a rival company founded by Martin Harris – the son of Carpetright founder Lord Harris of Peckham – issued an announcement on Monday saying it was “desperately sad” that it was unlikely to be able to save more of the business.
Under the terms of the proposed rescue, Tapi has offered to buy the Carpetright brand, 54 stores and two warehouses, with the deal expected to save more than 300 jobs.
However, an initial press release confirming the deal was later withdrawn, leaving the status of the deal uncertain. It said the agreement had not yet been completed but sources said it could be finalised later on Monday.
Should it proceed, it means huge swathes of the business are expected to close, with around 200 Carpetright stores not included in the deal. This would put at least 1,000 roles at risk.
Jeevan Karir, managing director of Tapi said: “Our goal, initially, was to try to save all of Carpetright.”
He said Tapi had quickly realised that this was unviable, adding: “The business has been materially loss-making for a number of years and it has significant debt held by the owner.”
Tapi, which was launched in 2015, has grown to become Carpetright’s biggest competitor in the flooring industry.
This has prompted concerns that the deal will attract scrutiny from the Competition and Markets Authority (CMA).
Tapi said it was “mindful of how the CMA may view a larger deal”, which influenced its decision to offer to buy just 54 stores.
It said the sites it was looking at were in “a number of areas we don’t currently serve”.
The proposed rescue deal will mean the Carpetright brand will once again be steered by the Harris family.
Mr Harris stepped down as chief executive of Tapi four years ago and gave up an executive post earlier this year.
However, both Lord Harris and Mr Harris’s son Charlie hold senior positions within the company. Lord Harris also sits on its board.
Lord Harris, who took over the family flooring business when he was 15, stepped back from Carpetright in 2014.
Five years later the business was bought by Meditor, a hedge fund run by Talal Shakerchi, former Old Mutual banker and poker player. It had, up until that point, been listed on the London Stock Exchange.
Mr Shakerchi vowed to turnaround the business. However, Carpetright has not made a profit since the takeover, according to Companies House filings.
In the 14 months to January 2022, sales were down at £372.6m compared to £493.2m for the 18 months prior.
Tapi, meanwhile, has been growing its customer base. Its most recent set of results suggested revenues were up at £158m in 2022, compared to £137m a year earlier.
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