Blame game at the top of Mothercare

MOTHERCARE’S chairman has apologised for a boardroom debacle that fuelled the struggling retailer’s crisis.

Clive Whiley said a row between his predecessor Alan Parker, and chief executive Mark Newton-Jones had ramped up pressure on the business just as it was desperately trying to stave off collapse.

In a humiliating admission, he also conceded that the mother-and-baby retailer had splashed too much money on costly consultants and that there had been a ‘breakdown in trust’ with shareholders. It came as Mothercare unveiled losses of £87.3m for the year to March 30, even worse than a £72.8m loss for the previous 12 months.

Shareholders had been expecting bad numbers and cheered the board’s plans for a turnaround, sending shares up 9pc, or 1.85p, to 22.25p.

Whiley, 58, was parachuted into Mothercare in April 2018 to stabilise the business and steer it through a deal with landlords to cut rent bills.

His appointment came after a chaotic period which saw NewtonJones fired by Parker amid a blame game over the group’s collapsing share price.

But in an extraordinary turn of events just weeks later, Parker was ousted by the other members of his board and Newton- Jones was brought back to resume his role as chief executive.

Mothercare’s stock has been hammered by numerous profit warnings and fears about tough competition from online rivals and supermarkets.

Whiley – who is interim executive chairman – said decisions taken by the business last year had saved Mothercare.

‘However, shareholders deserve an explanation of the events,’ he wrote in the company’s annual results. He said Mothercare had been hemmed-in by costly rent bills and a debt mountain, which stood at £237.2m at the end of March last year, while also failing to modernise its shops and website quickly enough. But he added: ‘The difficult situation was further fuelled by a fracture in the relationship between the non- executive and operating executives, a break-down in trust with key shareholders and the appointment of an array of increasingly expensive professional advisers.’

Whiley said Mothercare’s turnaround is under way, and insisted a boardroom overhaul has cut costs and brought in people with relevant experience. Last year it also agreed a so-called company voluntary arrangement (CVA) with creditors and landlords to restructure debts, cull 800 jobs and close 50 stores.

He said: ‘A combination of our efforts, to galvanise all available resources over the last year, has bought us the time to address the impact of the ongoing trends within the UK retail sector and to concentrate upon our vision to be the leading specialist global brand for parents and young children.’

However, the scale of the challenge facing Whiley and other bosses was underlined as Mothercare unveiled widening annual losses – despite the company finishing its store closure programme ahead of schedule.

It has cut the total number of shops from 134 stores to 79.

Mothercare’s worldwide sales slipped 7.9pc to just over £1bn.

But boss Newton- Jones said: ‘We have achieved a huge amount this year, refinancing, restructuring and reorganising Mothercare to ensure a sustainable future for the business.

‘The majority of that work is now done, including the completion of our store closure programme.’

Newton- Jones said the company will focus on improving its website, giving customers more ways to pay and offering more exclusive products.

The group also reduced net debt to £6.9m, from £37.2m a year ago, after raising £29.6m from a share sale, selling its head office for £14.5m and selling The Early Learning Centre to The Entertainer for £11.5m.

Mothercare was one of a number of retailers launching CVAs last year in a bid to shrink their store footprint.

Carpetright and New Look also shut shops using the process.