United Carpets buys United Carpets

United Carpets Group has purchased the assets and business of its trading subsidiary United Carpets (Northern) Limited.  United Carpets Limited currently employs about 400 staff members spread out over its 72 stores that are all part of the deal along with two warehouses. One store did close before the chain went into administration but a spokesman stated that the closure of the store had nothing to do with the process.

Thomas, an administrator stated that the administration came as a result of the tough economic climate but also because of the many long-term financial commitments to landlords for leasing the stores. The company apparently attempted to renegotiate lease terms over and over again but they were unable to do so.  At this point, the only choice they had was to enter administration.

The sale of the company has helped to keep the jobs of the employees who work for the company safe.  Experts in insolvency blame quarter day payments for the sudden administrations that were also seen to occur with Optical Express and JJB Sports. Quarter day payments demand that a business makes a rent payment every three months.

However, landlords will have to wait to see their money as rent is paid after the costs of secured creditors, such as banks, and after the administration costs are taken care of.  The structure of the payment has led to many administrations taking place directly after quarter day, so that the premises can remain occupied for the rest of the quarter without worrying about rent for another three months.  This places landlords in a bad position since they know they will either have to either accept lower payments, or risk that they will lose another commercial tenant to administration.