The crisis gripping the High Street looks set to claim another 2,300 jobs as retailers complain of the toughest trading conditions for 25 years.
Carpetright is planning to close 92 stores, putting 300 workers at risk, while the remaining 75 Toys R Us shops will shut in the next two weeks with the loss of 2,054 jobs.
The prospect of further job losses came as High Street chains Mothercare and WH Smith reported falling sales at stores. By contrast, WH Smith said sales at train stations, airports and hospitals rose.
Closing down shops: Carpetright is planning to close 92 stores, putting 300 workers at risk
With thousands more jobs expected to go as Maplin and New Look shut shops, John Lewis managing director Paula Nickolds said the sector was being hit by shoppers going online.
‘There’s no doubt it’s a tough environment for retailers at the moment, whether it’s a combination of structural change and customer behaviour change, low consumer confidence and the impact of import prices,’ she said.
‘It’s a tough time for retail in general and probably the toughest time I’ve known in my 25 years in the industry.’
She echoed Next boss Lord Wolfson last month, when he admitted the retailer had dealt with its ‘most challenging’ year in a quarter of a century.
In addition to closing shops, Carpetright is racing to secure an agreement with landlords to get rent cuts of up to 50 per cent at 113 sites. It employs 2,700 people across 412 stores.
It plans to raise £60million to cover the cost of a rescue deal – called a company voluntary agreement – which it will need to have approved by its landlords and creditors in order to start closing shops.
Millions of pounds have been wiped off the value of Carpetright as it issued three profit warnings in just four months. Its shares fell another 8.1 per cent yesterday, taking losses for the year to 78 per cent.
Chief executive Wilf Walsh blamed the woes on previous owners who he accused of opening ‘over-sized, over-rented and poorly located’ stores.
‘I think we’re very different from a Maplin and a Toys R Us – we are Amazon-proof. The problem we’ve got is this historical legacy portfolio of stores that won’t go away,’ he said.
Collapsed: At Toys R Us 2,054 workers will be left jobless when it winds down later this month
At Toys R Us, which fell into administration earlier this year, just over 2,000 workers will be left jobless when it winds down later this month. Around 800 people have already lost their jobs.
Same-store sales at Mothercare fell 2.8 per cent in the 12 weeks to March 24 – an improvement on the 7.2 per cent drop in the previous period, while online sales were up 7.2 per cent. Shares rose 6.7 per cent yesterday, having fallen 95 per cent in the past five years.
WH Smith reported a 1 per cent fall in profits to £82million in the six months to February 28 as sales at its 610 stores tumbled 4 per cent. But its travel division, which includes shops in hospitals, train stations and airports, saw a 3 per cent rise.
Quiz is known for its cheap and cheerful clothes for young people
… But web sales are soaring
Booming online trading at fashion chain Quiz and homeware retailer Dunelm bucked the gloom engulfing the High Street.
Quiz, known for its cheap and cheerful clothes for young people, saw online sales rocket by 158 per cent last year, helping to lift total sales 30 per cent.
Quiz’s chief commercial officer Sheraz Ramzan said part of its success was due to quickly reacting when new fashion trends emerge. He said: ‘It comes down to ensuring you have the relevant offer for your customer, adapting with changing habits.’
Dunelm’s shares flew to close almost 9 per cent higher last night after it posted a 35.7 per cent rise in online sales in the 13 weeks to March 31. Its strong online performance boosted total like-for-like sales by 4.6 per cent to £232.2million.
The retailer is now focused on growing its online business, and has halted and fur ther store openings for the year.
Sales in its shops rose 1.2 per cent during the period, which analysts said should be ‘praised’ as heavy snowfalls caused so much trouble for many retailers in February.