New Mothercare boss set to lay bare extent of retailer’s troubles

MOTHERCARE’S new chief executive is set to update the market on the troubled retailer’s store closure plans this week, with the group also tipped to report a sharp fall in profits.

David Wood, who replaced Mark Newton-Jones just weeks ago, will lay bare the challenge the chain faces at Mothercare’s annual results on Thursday.

A consensus of City analysts forecast the group will post a 95% fall in underlying pre-tax profits to just £1m in the year to March. The figure compares with a profit of £19.7m last year.

It will come alongside an update on Mothercare’s refinancing progress, with the group having mandated KPMG to help it secure additional cash from its lenders HSBC and Barclays.

Rothschild is also working with the group to secure outside funding.

Since taking the helm in April, Mr Wood has said his “immediate priority” is to ensure Mothercare returns to firmer financial ground.

To this end, he is expected to announce an acceleration of its store closure programme, with speculation rife that this will be carried out through a company voluntary arrangement (CVA) – a move which would allow it to close loss-making shops and secure rental discounts.

Despite its travails, Clive Black, analyst at Shore Capital, struck an upbeat tone: “Mothercare clearly faces a number of challenges at this time, but retains an excellent and still-relevant brand in our view.”