United Carpets warns of closures

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United Carpets today became the latest high street casualty as it warned of “significant” store closures after its main trading arm collapsed into administration.

The Rotherham-based flooring and bed chain bought the subsidiary immediately out of administration and is now holding last ditch talks with landlords to reduce rent payments.

But United Carpets, which employs more than 400 staff across 72 stores and franchise outlets, said landlords had so far been unwilling to lower rents and confirmed it would need to shut stores where agreement cannot be reached.

The news comes after it announced last month it was closing about 14 loss-making stores, blaming tough market conditions and "very challenging" trading.

United Carpets joins a growing list of retailers who have fallen victim to difficult high street conditions.

JJB went into administration on Monday with the loss of 2,200 jobs and Optical Express announced 40 store closures earlier this week after a subsidiary was also placed in administration.

Lila Thomas, partner at United Carpets administrators 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."

Shares of United Carpets were suspended in August as the firm delayed publishing its annual results to complete a review of the business.

It said today the review found that a "significant" number of stores would be unable to trade without "substantial" rent payment reductions.

But landlords are becoming increasingly angry as the recent spate of retail administrations have left many out of pocket

Caroline Howard, partner at international law firm DAC Beachcroft, said landlords were being hit at a crucial time of year.

She said: "In the run-up to Christmas, landlords can often secure short lettings to pop-up shops and cover outgoings on empty premises.

"If administrators choose, however, they can keep shops open until close of play on Christmas Eve and pay no rent in that most lucrative trading period of the year."