Jobs under threat as Carpetright plans closure of loss-making stores

The group said it was "exploring" a company voluntary arrangement to help shore up its financial position, a move which would allow it to close loss-making shops and secure deep discounts on rental costs.

If the CVA goes ahead, Carpetright would push through an equity issue of between £40 million and £60 million to fund plans to reboot the business and drive down debt.

The group has 409 UK shops including branches in Dudley, Wolverhampton, Walsall, Kidderminster, Oldbury, Oswestry, Shrewsbury and Telford, Stafford and two in Cannock.

With another 138 stores in Ireland, Belgium and Holland, Carpetright employs around 3,000 people.

The company said today it had also agreed a £12.5 million unsecured loan from major shareholder Meditor to help with "short-term working capital requirements".

It marked another dark day for Britain's beleaguered high street, with Mothercare confirming that it had reached an agreement with lenders to defer the testing of its financial covenants as it "engaged in preliminary discussions" on securing additional financing.

Carpetright chief executive Wilf Walsh said it would be "business as usual" for the flooring firm's stores during Easter and it would remain in "close contact" with staff over its restructuring plans.

He said: "I am pleased that we have secured this additional support from one of our major shareholders as we continue to explore the feasibility of a CVA and a conditional equity issue.

"These further cash resources will enable us to make the necessary decisions free from short-term funding pressure.

"The aggressive store opening strategy pursued by the company's previous leadership has left Carpetright burdened with an oversized property estate consisting of too many poorly located stores on rents which are simply unsustainable."