The company is also cutting 300 jobs.
The beleaguered retailer, which employs 2,700 people in the UK, said 11 of the sites earmarked for closure had already stopped trading.
The move follows a review of its property portfolio which found 205 sites were underperforming or on unfavourable lease terms.
Carpetright said it hoped to relocate affected staff - and said rent would be slashed on the other 113 struggling sites under the rescue plan.
Wilf Walsh, chief executive of Carpetright, said: "These tough but necessary actions will enable us to address the burden of a legacy UK property estate consisting of too many poorly located stores on unsustainable rents, and are essential if we are to restore our profitability and deliver a successful turnaround.
"We will remain in close contact with all colleagues to keep them fully informed as we move through this process."
The company's shares tumbled by 19% at one stage in early trading after Thursday's proposals.
Carpetright, which trades from 409 shops across the country, revealed last month that it was exploring a strategy to get back on its feet after battling difficult trading conditions.
It also warned it was likely to slump into the red this year and was looking at a range of options to beef up its balance sheet.
Mr Walsh blamed previous bosses of the company for pursuing an "aggressive store opening strategy".
The company said since its last update in March, trading had remained "difficult" and it still expected to report a loss for the year to 28 April.
The restructuring comes under a Company Voluntary Arrangement (CVA) - a form of insolvency aimed at protecting a business from going bust by cutting its costs.
The firm said the CVA would help it to "address the competitive threat from a position of strength".
It also confirmed it was seeking to raise £60m from investors to fund plans to reboot the business and bring down debt.
The details came as it revealed a "technical breach" of its banking arrangements, but the group said it was taking action to address this and ensure it is amended for the future.