Singapore Markets close in 5 hrs 19 mins

​​Is the high street on the verge of the biggest​ ​crisis since 2008?​ ​Now Bargain Booze, Wine Rack ​​and Carpetright​ scramble to avert collapse

Ben Marlow
The owner of Bargain Booze, Conviviality, is the latest high street shop owner to launch dramatic rescue plans - Paul Grover

The high street is facing a full-blown crisis as the company behind off-licence chains Bargain Booze and Wine Rack scrambles to avert collapse and Carpetright prepares to close scores of shops.

This weekend, drinks retailer Conviviality is hurriedly putting together a new business plan that will form the basis for an emergency fundraising due to be launched in the coming days.

The company was plunged into chaos last week, following a string of calamitous financial mishaps that led to its shares being suspended.  Without an injection of cash, Conviviality, which has 700 stores and 2,600 people, could go under, adding to the deep gloom on the high street.

Carpetright has found itself unable to escape the pressures of higher costs and squeezed consumer incomes Credit: Jason Alden/Jason Alden

Carpetright is also facing a desperate bid to stay in business.  The chain is planning to close a chunk of its 440-strong store estate, through a company voluntary arrangement, a ­restructuring scheme that enables businesses with too many outlets to pull out of some and negotiate cheaper rents on others.

A long list of retailers including New Look, together with restaurant operators Jamie’s Italian and Prezzo, have closed branches through CVAs this year, piling on the pain for landlords and employees.

In the past few weeks alone, Toys R Us and Maplin have both gone bust with the loss of nearly 6,000 jobs.  Bed maker Warren Evans has also folded and Mothercare is seeking fresh financing, while staff cuts have been announced at Tesco, Sainsbury’s, Marks & Spencer, Debenhams and New Look. Hundreds of stores will be left empty.

casual dining restaurants crisis business

Conviviality is preparing to beg shareholders for as much as £150m. PwC is advising the company and its banks have enlisted Deloitte. The cash call will help it meet an outstanding tax bill and provide much-needed funds to keep its shelves stocked with goods.

Management is confident investors will come to the rescue. However, insolvency experts cautioned that Conviviality’s troubles have erupted so quickly that backing may be hard to secure.

Failure to source further financing quickly would almost certainly force it into administration. This week, retail giants Next and Kingfisher are set to report sliding fortunes, with the fashion firm expected to reveal a second year of declining profits.