The South Tyneside branch of national store chain Carpetright has been earmarked for closure.
The store, in Victoria Road, South Shields, is one of a number across the country which will close its doors as part of a Company Voluntary Arrangement (CVA).
Regrettably, we expect this will mean that around 300 colleagues would leave the business but we will make every effort to find alternative roles for those affected wherever possible.Carpetright spokesman
It is understood those stores set to shut will continue trading until September.
As yet, it is not clear how many jobs will be lost at the South Shields store as the company look to redeploy staff to other outlets.
The news was announced yesterday with a spokesman confirming around 300 staff nationally would leave the business.
The chain said that there will be 81 stores closing as 11 are already closed and no longer trading but are still on lease.
A further 113 stores are set to have rent slashed under the company voluntary arrangement (CVA) proposals being put to landlords.
A Carpetright spokesman said: “We have announced some tough but necessary steps to address our legacy property issues and restore our profitability. We are launching a CVA proposal that, if approved, will result in the closure of 81 poorly located or over-rented stores, from a UK total in excess of 400, later this year. Planned closures will not affect our customers, all orders will be fulfilled either by the original store or a neighbouring Carpetright where necessary.
“Regrettably, we expect this will mean that around 300 colleagues would leave the business but we will make every effort to find alternative roles for those affected wherever possible. We’re also announcing that we plan to follow the CVA with an equity financing to raise £60m of new funds to invest in our stores and online offer, to strengthen the competitive position of the ongoing business.
“It’s important to stress that throughout the CVA process, we will continue trading as normal and customers can continue to shop with Carpetright with confidence. We do not expect the proposed stores to close before September 2018.
“We will remain in close contact with all colleagues to keep them fully informed as we move through this process.”
The company has 409 shops throughout the UK selling a range of flooring from carpets to vinyl and laminate and employs 2,700 staff.
The chain has also confirmed they need to raise £60 million through a rights issue to put the company on a firmer financial footing.
The CVA is a form of insolvency aimed at protecting a business from going bust by cutting its costs.
Landlords will vote on the plans on April 26, while shareholders will have their say on April 30.