The flooring retailer described 2018 as a “transitional year” and said it expected trading to be heavily impacted by disruption, as the group downsizes portfolio and closes 65 UK stores.
The trading update revealed that like-for-like performance remained negative in Q2, as implementation phase of the restructuring process “commenced in earnest”, said the company.
During the trading period, Carpetright closed 65 stores in the UK and two within its European operations, with a further six stores expected to close before the end of the year.
The business said there was an improvement in performance towards the end of the trading period, as the restructuring activity began to take effect. Meanwhile, Carpetright said it remains confident of achieving the £19million of annualised benefits announced as part of the recapitalisation of the group in May this year.
Chief executive Wilf Walsh said: “This is a transitional year for Carpetright, as we work through our restructuring plan. I am pleased to report that this activity is firmly on track and has started to yield benefits as we create a right-sized and well-located portfolio of stores on sustainable rents. We also continue to modernise our existing estate as well as investing in our digital capability.”
Despite a weak performance in the UK, trading in the rest of Europe (The Netherlands, Belgium and the Republic of Ireland) has been slightly ahead of the same period last year, said Carpetright.
In June, Carpetright got the go-ahead from shareholders for its recovery plan and, by the end of the month, reported pre-tax losses of £70.5million for the year ended April 28, with trading hit by the ongoing CVA and withdrawal of some suppliers, which lead to stock shortages.