Tapi Group has purchased 56 Carpetright sites from the beleaguered flooring retailer, which went into administration this month.
Zelf Hussain, Rachael Wilkinson and Peter Dickens of PwC, who were appointed joint administrators of Carpetright Ltd, have completed a sale of 54 stores and two logistics hubs to CWHP Ltd, part of the Tapi Group.
The transaction includes the transfer of 308 employees.
Carpetright, a subsidiary of Nestware Holdings, was founded in 1988, and operates across the UK and the Republic of Ireland. Headquartered in Purfleet, Essex, it has 273 stores and 1898 employees.
The company revealed in recent weeks that it had been hit by challenging trading conditions, predominantly due to "changing consumer preferences and a drop in home improvement spending post-pandemic". The business was also impacted by a cyber attack in April, which had left it unable to trade for a period of time.
Rival Tapi was established by Martin Harris, son of Carpetright's founder Lord (Philip) Harris of Peckham, and a former director at the firm.
According to PwC, this transaction represents the best option available to generate returns for creditors as a whole, under "severely limited timescales".
A separate agreement was reached between Nestware Holdings and Tapi Group for the company’s IP and brand.
The administrators will retain employees at the company's head office for a short time to support in winding down operations, adding: "It is with deep regret that 1018 individuals employed at sites which were not included in the transaction, and those providing in-home services, have had to be made redundant immediately on appointment.
"The administrators are working closely with the Redundancy Payments Service (RPS) to ensure that those affected receive their statutory entitlements as soon as possible. Tapi Group has shown a strong dedication to assisting affected Carpetright employees, by collaborating with other retailers to ensure their job applications receive priority and funding workshops aimed at improving employability skills. The administrators will assist in facilitating this."
For outstanding orders made through stores included in the sale, further guidance can be found here. Orders placed with stores not included in the transaction are unable to be fulfilled, and it is recommended that affected customers contact their payment card provider about the possibility of obtaining a refund, states PwC.
Joint administrator Zelf Hussain says: “Carpetright has fallen victim to challenges facing many retailers, especially those selling big-ticket items. A mixture of factors, including a big reduction in consumer spending due to cost of living pressures, lower home sales and a debilitating cyber attack made it impossible for the business to continue in its current form.
“The sale of some stores and the brand to Tapi has allowed over 300 jobs to be saved, and gives the Carpetright brand the chance to continue and flourish under its new ownership.
“However, it is deeply saddening that for the remainder of the workforce there will be redundancies. We are committed to helping those affected and will make sure redundancy claims are processed as quickly as possible. In collaboration with Tapi, we will assist in efforts to help individuals find new jobs elsewhere.
“We know this is an uncertain time for many of those affected and want to thank all the staff for the support they have given the company in these difficult circumstances.”
The sites included in the Tapi Group transaction are Basildon, Birmingham - Erdington, Bishopbriggs, Bristol - Longwell Green, Camborne, Camden, Carmarthen, Cheadle, Chesterfield, Chichester, Chippenham, Clapham Common, Coventry - Airport Retail Park, Cramlington, Croydon, Dumbarton, Dumfries, East Sheen, Edinburgh - Hermiston Gait, Epsom, Farnborough, Friern Barnet, Haywards Heath, Hemel Hempstead, Hereford, High Wycombe - Loudwater, Holloway, Hove, Ipswich - Anglia Park, Lancaster, Leeds - Kirkstall, Maidstone, Mansfield, New Malden, Newbury, Newmarket, North Shields, Norwich - Sprowston, Peterborough, Plymouth - Marsh Mills, Southampton - Hedge End, Stockton, Swindon - Bridgemead, Teddington, Trowbridge, Truro, Washington - Armstrong, West Wickham, Weston-Super-Mare, Weymouth, Whetstone, Wimbledon, Woking, Yeovil, Chessington Warehouse and Croydon Warehouse.
The company’s operations in the Netherlands and Belgium are separate entities and are unaffected by insolvency proceedings.
Tapi states: "We are desperately sad not to have been able to save more of the business and customer orders. However, as we looked into the details of the situation, we quickly established that saving the entire business was unviable. Carpetright has been materially loss-making for a number of years, and it has significant debt held by the owner. We believe that we were the only offer that the administrator received that saved a large number of roles. We were also mindful of how the Competition and Markets Authority (CMA) may view a larger deal."
Jeevan Karir, MD of Tapi Carpets & Floors, adds: “Our goal, initially, was to try to save all of Carpetright. We then turned ourselves to trying to save a number of stores whilst being mindful of how the competition authorities would look at any deal. So, we arrived at 54 stores and two supporting warehouses – all of which are exceptional, and that we’d be proud to have as part of the Tapi family.”
