Nestware, the parent company of Carpetright, has incurred a significant financial loss due to the administration of its subsidiary, The Floor Room.
- The closure of The Floor Room in August resulted in 201 job losses, impacting employees across its operations.
- Prior to its closure, The Floor Room was the exclusive supplier of flooring to all John Lewis department stores.
- Nestware faced a substantial intercompany loan balance of £10.8m due to the administration of The Floor Room.
- Additionally, Nestware wrote off £175.4m related to its Carpetright business, which also went into administration.
Nestware, which owns Carpetright, encountered a major financial setback when it placed its subsidiary, The Floor Room, into administration. This decision resulted in a financial loss of £10.8m. The administration process led to the termination of 201 positions, reverberating throughout the workforce involved with The Floor Room’s operations.
The Floor Room had established itself as the sole provider of flooring and related products for John Lewis department stores from May 2023. It also managed a standalone retail outlet in London. The decision to cease operations affected this exclusive partnership, impacting both the business and its clients.
A key aspect of the company’s financial distress was an intercompany loan balance of £10.8m, which was deemed irrecoverable following the closure. Nestware’s challenges were not confined to The Floor Room alone; its Carpetright business also experienced financial difficulties.
In the latter part of July, Carpetright was placed into administration, similar to The Floor Room. Nestware was compelled to write off an additional £175.4m as a result of this process. This write-off included a revolving credit facility of £120m and loans amounting to £54.7m, all of which were deemed irretrievable.
Compounding the financial woes, Carpetright owed 11 retail businesses, including prominent names like B&M, Furniture Village, and Lidl, nearly £3.5m in unpaid rent. Moreover, some 21,000 customers were owed approximately £8m in outstanding orders, highlighting the extensive impact of the company’s financial troubles.
In summary, Nestware’s financial challenges underscore significant impacts on both its workforce and business relationships following the administrations of The Floor Room and Carpetright.
