ICSM Business – Retailing Insolvency News: customers have the rug pulled from under them as Carpetright collapses owing £80m

By Harry Mottram: You’ve paid out hundreds of pounds for that new carpet and await for it to be delivered and then find out the company has collapsed and you’ve lost every penny. That’s the unhappy experience of customers of retailing chain Carpetright the collapsed this month owing hundreds of thousands of pounds for deposits and down payments that will never be repaid.  

Reporting for the Retail Gazette Aoife Morgan noted: “Carpetright suppliers, customers and landlords have been left £80m out of pocket following the chain’s collapse at the start of the week. According to documents seen by The Times, the flooring specialist’s trade creditors including Condor and AW Weavers were owed around £24m at the time of its collapse. Carpetright also owes £30.9m to “other creditors”, including customers, as well as £15.6m to “other accruals”. The documents showed the retailer had built up £81.7m worth of liabilities on its balance sheet by the end of April, which is understood to have “not changed materially” since then.”

Founded back in 1988 in London I grew to open 273 shops across the country and employ close to 2,000 staff and was supplied by hundreds of companies who now face losing their trade and unpaid invoices. The BBC reported earlier this week that Tapi Carpets & Floors has bought the Carpetright brand name, the company's intellectual property, two warehouses and 54 stores, saving 308 jobs. But that leaves suppliers unpaid and over 1,200 staff without a job.

Ian Carrotte of ICSM said this was a black week for retailing with suppliers, staff and customers left high and dry. He said: “It is no secret that the firm didn’t have the highest of reputations for customer service but with high interest rates homeowners are struggling to update soft furnishings and have cut back. It is a problem across the economy – and at ICSM I always say to members that no matter how famous a name is – they can go bust. Always stick to you credit terms and put a customer on stop as soon as they stop paying on time. Sadly many suppliers such as independent carpet fitters and wood floor installers who are sole traders will not be paid. The Times reported that Condor and AW Weavers were owed around £24m at the time of its collapse. That's enough to take down many firms as a bad debt."

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