Tapi is speaking with Carpetright’s landlords in the hope of snapping up a clutch of the retailer’s stores that are subject to rent reductions under the terms of its impending CVA.
Lord Harris – the founder of Carpetright who quit in 2014 to back rival retailer Tapi – said Tapi’s property agents are in talks with landlords of some of Carpetight’s 113 ‘category B’ stores.
Under Carpetright’s proposed CVA, the embattled chain will pay reduced rents or receive more favourable lease terms at those sites when its restructuring plan is formally approved.
Landlords of those stores have break clauses through which they could terminate Carpetright’s leases and seek new tenants after six months.
“We’re negotiating with some of the landlords on those [stores] and are hoping to get some,” Lord Harris told Retail Week.
Tapi, which is run by Lord Harris’ son Martin Harris, also has its eye on a number of Carpetright units that are earmarked for closure.
Lord Harris declined to put a figure on the number of stores it would like to take from Carpetright but said it was likely to be in double digits.
“Until they are signed we can’t say how many,” he said.
The CVA
Carpetright’s CVA, as first reported by Retail Week, was rubber-stamped by creditors and shareholders last month.
The plan, which involves closing 92 of its 418 stores and around 300 job losses, is now only conditional on a successful equity financing of around £60m.
A Carpetright spokesperson said: “Having received overwhelming approval from both shareholders and creditors for the CVA, we are pressing ahead with our plans for an equity financing. We believe that a recapitalised Carpetright, as clear market leader with a recognised brand name, will continue to be an attractive prospect for landlords.”
Carpetright chief executive Wilf Walsh previously said that the “tough but necessary action” to address its “legacy property issues” will help restore the firm’s profitability.
In a trading update last month, Carpetright reported a 10.5% decline in fourth-quarter like-for-likes, and said it expected to report full-year losses between £7m and £9m.
Lord Harris reasserted his view that he “can’t be blamed” for Carpetright’s property woes, pointing to the retailer’s strong profits in 2015 and 2016.
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