Mexborough carpet group seeks to rebuild with new store deals

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Trading in the shares of Mexborough-based flooring and bed retailer United Carpets has resumed on the Alternative Investment Market.

United asked for its shares to be suspended last year while it reviewed the future of its 85 stores.

Later in the year it went into administration, after attempts to get landlords to reduce rents proved unsuccessful, and was sold in a ‘pre-pack’ deal to a wholly-owned subsidiary.

Trading in the group’s shares resumed after the company published its accounts.

United now operates from 66 branded stores, including 51 operated on a franchise basis.

Chairman Peter Cowgill said that following the administration, United had agreed new terms for leases on nearly two-thirds of the stores, resulting in reduced rents, reduced lease periods, break clauses or the removal of liability for dilapidations.

Chief executive Paul Eyre said United made profits of £400,000 on sales of £41.5 million, but was facing exceptional costs of £3 million before the company entered administration.

“The group is refocusing and re-establishing itself and once negotiations over the remaining stores have been completed, the operating base of stores will have reduced by around one-third since the start of the period,” said Mr Eyre.

“Progress continues to be made in re-aligning central costs with this reduced operating base.

“Our new trading entities are well stocked to support the ongoing trading of the store portfolio.

“The group has no borrowings and still retains reasonable cash reserves.

“While we are not anticipating an uplift in market conditions in the near term, the group is now better placed to benefit from an improvement in future market conditions.”