News: United Carpets take action in difficult market conditions
Rotherham-based United Carpets, the second largest chain of specialist retail carpet and floor covering stores in the UK, has terminated a number of franchises as the difficult market environment continues.
The Bramley-based business reported "reasonable performance" in December but they have seen that, apart from occasional, short-lived, promotion-led activity, trading for retailers generally and for "big ticket" retailers in particular has been extremely challenging.
United Carpets believes that their franchise model is a critical advantage over more traditional retail networks as the business benefits from the entrepreneurial drive and motivation of the individual store owners.
However, in a trading update, the group stated that the: "challenging environment has led to a significant proportion of our franchise network finding it increasingly difficult to operate satisfactorily, with particular issues in meeting their liabilities to creditors and the group."
Since the year end, the group has terminated a number of franchises, a move that is expected to have a detrimental affect on the performance of the AIM-listed company.
The group had around 85 stores in the UK but a number of stores are being reviewed in order to ascertain whether they can remain viable under the current franchise model.
The statement concluded that: "the Board will also consider the impact of such a review on the Group's results for the year ended 31 March 2012. Whilst such impact could be material, the Board anticipates that, with appropriately adjusted central costs, the continuing core of locations will be able to operate successfully on an ongoing basis."
United Carpets website
Images: United Carpets / facebook
The Bramley-based business reported "reasonable performance" in December but they have seen that, apart from occasional, short-lived, promotion-led activity, trading for retailers generally and for "big ticket" retailers in particular has been extremely challenging.
United Carpets believes that their franchise model is a critical advantage over more traditional retail networks as the business benefits from the entrepreneurial drive and motivation of the individual store owners.
However, in a trading update, the group stated that the: "challenging environment has led to a significant proportion of our franchise network finding it increasingly difficult to operate satisfactorily, with particular issues in meeting their liabilities to creditors and the group."
Since the year end, the group has terminated a number of franchises, a move that is expected to have a detrimental affect on the performance of the AIM-listed company.
The group had around 85 stores in the UK but a number of stores are being reviewed in order to ascertain whether they can remain viable under the current franchise model.
The statement concluded that: "the Board will also consider the impact of such a review on the Group's results for the year ended 31 March 2012. Whilst such impact could be material, the Board anticipates that, with appropriately adjusted central costs, the continuing core of locations will be able to operate successfully on an ongoing basis."
United Carpets website
Images: United Carpets / facebook
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