60 outlets to shut as Mothercare sheds 900 more jobs

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.

It was announced last month that the mother-and-baby chain planned to swing the axe on 50 shops as part of a shake-up, but it is now set to close 10 more.

The retailer said 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 restructuring plan known as a Company Voluntary Agreement (CVA), an insolvency procedure that required the approval of the retailer’s landlords.

The group has also undertaken a significant fundraising initiative to raise £32.5m 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.”

In morning trading, Mothercare’s shares were down nine per cent or 2.45p to 26.15p.

A list leaked on Twitter at the time of the first announcement in May, by Scottish property consultancy Ditchfield Property, appeared to state that shops in Bradford, Harrogate, Doncaster, Rotherham and Sheffield Crystal Peaks were expected to shut in the next 12 months.

It suggested a rent reduction was being sought for two more at-risk sites, Huddersfield and Sheffield Meadowhall, while four stores – Leeds, Hull, Wakefield and York – would be unaffected.

Mothercare fired its chief executive Mark Newton-Jones in April.

But he was later brought back to see the business through its CVA.

He said the UK market was “frankly quite brutal” and that Mothercare was looking for opportunities to grow sales internationally.