Carpetright has become the latest household name to fall into insolvency following the likes of The Body Shop, Ted Baker and online luxury fashion retailers Matches and Farfetch earlier this year.
The business, which is one of the largest British retailers of floor coverings and beds, has now been rescued out of administration by rival Tapi with the loss of more than 1,500 jobs and 218 stores.
Just over 300 jobs are being saved as part of the deal along with 54 shops.
According to data, it’s estimated that 1,018 Carpetright employees face immediate redundancies, with others estimated to be redundant by the end of the week.
How will Carpetright employees be affected?
Kevin Mountford, savings expert and co-founder of Raisin UK, said: “The news that over 1,000 roles at Carpetright are now redundant will be massively disappointing for their employees who were hoping for a rescue deal.
“Tapi has confirmed they have acquired around 300 staff members who will retain their jobs with the new parent company, however, Carpetright’s other employees face a much more difficult situation.”
According to The Insolvency Service, employees might be entitled to statutory redundancy pay, compensatory notice pay and holiday pay.
Staff can apply to the Insolvency Service for redundancy and other payments if you worked for the company under an employment contract.
Workers and self-employed contractors who provided services to the company are not eligible to apply.
How will customers be impacted?
Mountford added: “Due to the deal meaning Tapi just acquired some stores and the intellectual property of Carpetright, it does sadly mean Tapi doesn’t have to fulfil any existing orders, refunds, or guarantees.
“This means that if you have a pending order, this will not be fulfilled and you won’t be receiving a refund from the now-defunct Carpetright business.
“If you paid by credit card – you should contact your provider and initiate a section 75 refund.
“Additionally, if you paid by finance, you should contact the provider (who most likely is Novuna).
“As your debt is with the provider, you will still be expected to make payments or risk your credit score.
“Gift cards are also no longer redeemable at Carpetright, and you will not be able to redeem them at Tapi. In this instance, you should most likely contact the issuer of the gift card and to see what options are available.
“Tapi also confirmed that all guarantees are null and void.”
Why did Carpetright go into administration?
Mountford said: “What has made this purchase so difficult and ultimately led to the closure of over 200 stores is that, simply, Tapi and Carpetright stores are usually situated right next to each other.
“With the success of competitors like Tapi, the flooring retail market is highly competitive and the increased cost-of-living crisis has made consumers reassess the need for house refurbishments.
“Additionally, their recent cyberattack that resulted in their stores and website being unable to accept orders only worsened their outlook.
“Carpetright will leave a massive hole in retail parks across the country and is a true reminder of a volatile retail industry as many households continue to struggle with the cost-of-living crisis.”