NEWS: Carpetright goes into administration

NEWS: What Caused the Carpetright Administration?

Carpetright, a major player in the UK flooring market, recently went into administration, leading to the closure of over 200 of its stores. Although a rescue deal was struck with Tapi Carpets, the company's main competitor, this deal only saved a portion of the business, making significant store closures and job losses inevitable.

Several factors contributed to this situation:

1. Financial Struggles: Carpetright has been under financial strain for some time, exacerbated by mounting debts and difficulties in managing cash flow.
2. Consumer Behavior: There has been a noticeable shift in consumer spending patterns, with more people buying flooring online or delaying big-ticket purchases due to economic uncertainty. This has hit physical retail stores particularly hard, as foot traffic has decreased.
3. Data Breach: Carpetright suffered a hacker attack that impacted their back-end systems and ability to make sales. This affected their capacity to receive orders and generate revenue.
4. Increased Competition: The flooring market has seen increased competition, not just from traditional rivals like Tapi, but also from online retailers and discount outlets, which have put additional pressure on prices.
5. Pricing: Carpetright and other main retail outlets are known in the trade for being ‘very expensive’. However, this is mainly due to the rent and rates of their retail units, as well as the need to staff them. What is less known by the public is that online retailers, such as ourselves at www.carpets-online.co.uk, can often provide the same carpets for half the price due to not having the overheads. We also need to make less margin on the carpets since we don't have to cover the large costs of running physical stores. A great example of the price difference is our Luxos range, which was priced at £24.99 at Carpetright.

What Was the Immediate Impact?

Customers who had already paid lost out, as gift cards and warranties were no longer valid. There were over 1,800 job losses despite Tapi taking over some of the stores and warehouses. Companies such as Microsoft and waste management will have to work with administrators and are unlikely to recover the full amounts they are owed. Carpet suppliers like Condor have lost over a million pounds that they won’t recover. Further information can be found in the following articles:

Carpetright collapse leaves customers, suppliers, and landlords £213m out of pocket - Retail Gazette

MoneySavingExpert also provided some useful information: Carpetright falls into administration – your rights.

How Much of This Was Due to the Decline of the UK High Street?

The closure of Carpetright stores is part of a broader trend affecting many UK high street retailers, as they struggle to adapt to a rapidly changing retail landscape. Retail stores have high overheads such as rent and rates for the large units they occupy. The main reason we at https://www.carpets-online.co.uk/sale?page=1 can offer our customers low prices on carpets is that we are an online-only business with a single warehouse. This keeps our costs low and allows us to sell to our customers at lower prices. We would not have been able to do that if we had a number of physical stores with their own overheads.

We also keep it simple by only supplying and delivering our carpets, allowing customers the choice to find their own fitter, who often ends up being cheaper than the ones from mainstream stores such as Carpetright or SCS. If our customers don’t have one already, we suggest they look at the National Institute of Carpet and Floor Layers or www.Yell.com.