The resolution of the bankruptcy of Carpetright Netherlands sheds ever sharper light on the financial havoc left by the flooring chain. The second bankruptcy report shows that the company has outstanding debts of at least €13 million. The tax authorities head the list of creditors with a claim of almost €8 million.
Whereas when the bankruptcy was declared in September last year it was already clear that a restart for the 75 Dutch shops was not feasible, the new figures show the extent of the financial problems. Of the total debt of €13 million, the lion's share, around €8 million, is owed to the tax authorities. Because the tax authorities, as preferential creditors, are given priority in the settlement, other creditors in the housing sector have little chance of seeing their claims fully settled.
© Carpetright
Fatal confluence of IT problems and losses
The collapse of Carpetright Netherlands can be attributed to a complex interplay of factors, according to the receivers (Mr J.M. van Raaijen and Mr J.V. Maduro). One of the most striking causes was the implementation of a new software system. This system recorded turnover data incorrectly, resulting in double-counting of transactions and a much lower actual turnover than the management initially thought.
On the assumption that this was a temporary technical problem, it was decided to postpone payments to the tax authorities. When it became clear that the IT errors were structural and the financial position deteriorated rapidly, the tide could not be turned. An intended WHOA (Homologation Private Agreement Act) process proved unfeasible as the company was no longer deemed viable.
No future for the chain
The permanent closure of the 75 branches and the dismissal of the approximately 350 employees brought an end to the retailer's long-standing presence in the Dutch market. Hopes of a restart, even in slimmed-down form, were earlier dashed by the trustees.
Source: RetailTrends / Bankruptcy report Carpet-Land B.V.
