Administration of United Carpets (Northern) Ltd

4 October 2012

United Carpets Group plc

("the Group" or "the Company" or "United Carpets")

Notice of Appointment of Administrators to United Carpets (Northern) Limited

The Company announces that on Thursday 4 October 2012 David Robert Acland and Lila Thomas of Begbies Traynor (Central) LLP were appointed as joint administrators of United Carpets (Northern) Limited ("UCN").

UCN is the principal trading company of the Group, owning the Group's corporate stores and also acting as franchisor of the Group's franchises.

Immediately following the joint administrators' appointment, the business and the majority of the assets of UCN were sold to United Carpets (Franchisor) Limited, a direct wholly-owned subsidiary of the Company and also the sole shareholder in UCN. The sale included both the corporate stores owned by the Group and the franchise agreements, amounting to 72 stores in aggregate.

The appointment of the joint administrators followed a review of the business which concluded that without substantial rent reductions a [significant] number of the corporate and franchised stores would be unable to continue to trade. Efforts to agree reductions with landlords were not successful. United Carpets (Franchisor) Limited will now seek to agree appropriate rents with landlords and, if necessary, will close those stores where agreement cannot be reached.

The Board is disappointed at the need to take these steps but is confident that the core of locations remaining once the restructure is concluded will, with appropriately adjusted overheads, provide the foundation for a successful and sustainable business.

Enquiries:

United Carpets 01709 732 666

Paul Eyre, Chief Executive

Ian Bowness, Finance Director

Cardew Group 020 7930 0777

Tim Robertson

Seymour Pierce

Jonathan Wright/Mark Percy (Corporate Finance) 020 7107 8000

Katie Ratner (Corporate Broking)