Carpetright is the latest retailer to signal financial difficulties, warning it expects to make a loss this year and has started talks with lenders to ensure it complies with loan terms.
Issuing its third profit warning in four months, the home furnishings firm on Thurday said it was also looking at options to speed up its turnaround and boost its balance sheet given its trading woes, but said plans were at an “early stage”.
“The bank lenders have indicated that they currently remain fully supportive,” the company added. The share price slumped 25% to 58p in early trading.
Carpetright said trading has remained difficult in recent weeks, with like-for-like sales still falling despite improving since its last update in January. It blamed continued weak consumer confidence.
The company’s profit warning is further bleak news for the UK retail sector, the day after Toys R Us and Maplin went into administration, putting at risk more than 5,000 jobs.
The home furnishings sector has been particularly hard hit by the squeeze on household budgets as the pound fell against other currencies in the wake of the Brexit vote, driving up inflation. Multiyork, Feather & Black and Warren Evans have all ceased trading since November.
Carpetright said UK like-for-like sales remained below expectations and it expected to report a small underlying loss for the year ending 28 April.
The company last downgraded its profit guidance on 19 January, after disappointing post-Christmas sales.