The Courier & Advertiser (Fife Edition)
Mothercare plans to shut 60 stores in next year
RESTRUCTURE: Struggling children’s retailer is adding to its store closures
Mothercare is to close another raft of stores, meaning 60 of its outlets will be shut by June next year, putting 900 jobs at risk.
The retailer – which operates shops in Dundee and Kirkcaldy – announced last month that it would close 50 underperforming stores as part of its restructure plans.
The firm yesterday added to that number by stating it was putting its Children’s World division into administration, but that 13 of these 22 stores would be saved.
The changes come after Mothercare cleared a company voluntary agreement (CVA), an insolvency procedure that required the approval of the retailer’s landlords.
Yesterday the company would not clarify the future of its Fife and Dundee shops.
The future of the Kirkcaldy branch in particular has been the subject of speculation after its name appeared on a memo – leaked on social media in May – of stores to be axed.
A company spokesman said: “We don’t comment on individual store closures and our priority is to speak with those staff who are affected.”
Meanwhile the group has also undertaken a significant fundraising initiative to raise £32.5 million from its existing shareholders.
Mothercare has identified savings of £19m through the process, and hopes to realise £10m in cash.
Clive Whiley, Mothercare’s interim executive chairman, said: “When I joined the business just three months ago Mothercare faced a bleak future with growing and pressing financial stresses upon the business.
“We have worked tirelessly as a team to get to where we are today and this fully underwritten equity issue marks the end of this initial phase, returning the group to financial stability.”
Mothercare fired chief executive Mark Newton-Jones, in April, but he was brought back to see the business through its CVA. Mr Newton-Jones said: “I think it is probably fair to say I would like to have not left in the first place. I have come back to finish off what we started four years ago.”
He said the UK market was “frankly quite brutal” and that Mothercare was looking for opportunities to grow sales internationally.
In May, Mothercare unveiled annual results swinging to a £72.8m pre-tax loss in the year to March 24, compared to a £7.1m profit in 2017.
The store closures come at a dismal time for the high street. Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look, Carpetright and others have embarked on radical store closure programmes.
Mothercare’s shares closed down
1.10p or 3.85% at 27.50p.