Hundreds of jobs at risk as United Carpets fails

United Carpets has become the latest retail casualty after it collapsed into administration, putting hundreds of jobs at risk.

The main trading company of the 72-store floor-covering chain appointed Begbies Traynor as administrator yesterday, after a dire performance.

But the retailer immediately tried to safeguard part of the group's future by selling the business and the majority of its assets to a franchise subsidiary of United Carpets in a pre-packaged administration. This means that if United Carpets cannot agree to slash its rental terms with landlords, a substantial number of unprofitable stores could close.

It is the latest job for insolvency practitioners this week after the sportswear retailer JJB Sports collapsed and the opticians chain Optical Express closed 40 shops as its subsidiary plunged into administration.

Lila Thomas, partner at Begbies Traynor, said: "The administration was a consequence of the challenging economic climate, but also the long-term lease commitments to the landlords of the stores.

"Attempts were made by the company to renegotiate lease terms, however, these proved unsuccessful. The administration became inevitable. The subsequent sale has safeguarded the jobs of those working for the company."

United Carpets, which is based in South Yorkshire, said: "The board is disappointed at the need to take these steps, but is confident that the core of locations remaining once the restructure is concluded will, with appropriately adjusted overheads, provide the foundation for a successful and sustainable business."

Shares in United Carpets were suspended in August, as the retailer said a review of its stores had led to the closure of six outlets and a further 17 franchised stores being either taken back into the group or refranchised.