News: United Carpets readmitted to AIM
Rotherham-based United Carpets, the UK's largest franchised carpet retailer, has been readmitted to the AIM stock exchange after delivering its delayed final results for the period ended October 5 2012.
In August, the Bramley-based group had its shares temporarily suspended after admitting it would not be able to publish its full-year results on time. In October, a pre-pack administration deal saw United Carpets Group acquire the business and assets of its trading subsidiary United Carpets (Northern) Limited.
A review of the group's 85 stores took place following a significant proportion of its franchise network finding it difficult to operate satisfactorily in the challenging environment.
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.
Now, the group operates from 66 stores, primarily across Northern and Central England, of which 15 are currently corporate stores and 51 are operated on a franchise basis.
Following the administration, the management team has been negotiating new leases with existing landlords. Terms have been agreed for nearly two thirds of them with reduced rents benefitting the franchisees.
Peter Cowgill, chairman of United Carpets, said: "It became increasingly clear from the review that the financial support provided by the group to franchisees, which was originally intended to be temporary, was becoming unsustainable and that without substantial rent reductions a significant number of stores would be unable to continue to trade, despite the underlying strength of the core locations."
The company posted pre-tax losses of £2.6m for the 18-month period to October 2012, hit by the financial impact of closing stores and trading conditions continuing to be challenging.
Paul Eyre, chief executive of United Carpets, said: "Increased pressure from competitors, negative perceptions created by the administration of UCN, reduced levels of marketing funds due to fewer stores and unhelpful weather conditions have all combined to make a difficult environment for the Group to re-launch itself and like for like sales in the 19 weeks since the period end are down 11.1%.
"Whilst this performance is disappointing, the removal of the majority of the loss making stores means that the Group and its remaining franchisees are better able to survive this downturn in trade.
"While we are not anticipating an uplift in the market conditions in the near term, the Group is now better placed to benefit from an improvement in future market conditions."
United Carpets website
Images: United Carpets
In August, the Bramley-based group had its shares temporarily suspended after admitting it would not be able to publish its full-year results on time. In October, a pre-pack administration deal saw United Carpets Group acquire the business and assets of its trading subsidiary United Carpets (Northern) Limited.
A review of the group's 85 stores took place following a significant proportion of its franchise network finding it difficult to operate satisfactorily in the challenging environment.
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.
Now, the group operates from 66 stores, primarily across Northern and Central England, of which 15 are currently corporate stores and 51 are operated on a franchise basis.
Following the administration, the management team has been negotiating new leases with existing landlords. Terms have been agreed for nearly two thirds of them with reduced rents benefitting the franchisees.
Peter Cowgill, chairman of United Carpets, said: "It became increasingly clear from the review that the financial support provided by the group to franchisees, which was originally intended to be temporary, was becoming unsustainable and that without substantial rent reductions a significant number of stores would be unable to continue to trade, despite the underlying strength of the core locations."
The company posted pre-tax losses of £2.6m for the 18-month period to October 2012, hit by the financial impact of closing stores and trading conditions continuing to be challenging.
Paul Eyre, chief executive of United Carpets, said: "Increased pressure from competitors, negative perceptions created by the administration of UCN, reduced levels of marketing funds due to fewer stores and unhelpful weather conditions have all combined to make a difficult environment for the Group to re-launch itself and like for like sales in the 19 weeks since the period end are down 11.1%.
"Whilst this performance is disappointing, the removal of the majority of the loss making stores means that the Group and its remaining franchisees are better able to survive this downturn in trade.
"While we are not anticipating an uplift in the market conditions in the near term, the Group is now better placed to benefit from an improvement in future market conditions."
United Carpets website
Images: United Carpets
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