Chairman took 2nd job weeks before collapse
The chairman of Mothercare took on a second job just weeks before the British high street chain collapsed.
Clive Whiley, who has been paid close to £1m since taking over as chairman in April 2018, took on the same job at funeral director Dignity in September shortly before the UK arm of Mothercare collapsed, putting 2,860 jobs at risk.
Whiley blamed ‘a near-existential problem’ on the British high street. But critics said it did not help he had taken on a second job.
Luke hildyard, of the high Pay Centre, said that while shop workers faced ‘poverty and precarity’ directors could ‘blithely swan into lucrative posts in other industries’.
he added: ‘Mothercare is only the latest high street chain to collapse, where thousands of people face unemployment but the senior managers pocket vast sums of money. Cases like this really highlight how tough the UK economy can be on those at the bottom, while those at the top always land on their feet.’
But a Mothercare insider said of Whiley: ‘You couldn’t find a more hands-on chair. he’s been guiding the way through a very difficult situation. Any accusation of not being committed is wholly inaccurate.’ The row came as PwC was appointed as administrator of the British arm of Mothercare and said the 79 stores and the online business would shut within months.
It intends to protect its profitable international business.
A major recapitalisation was launched, with £3m raised in equity and up to £20m from loans and bonds. It will pay off around £24m of debt by selling remaining stock, and conserve cash by reducing pension contributions for 18 months.
The UK arm lost £36.3m last year, compared to profits of £28.3m in the international business. The collapse puts the jobs of 2,860 shop, head office and distribution staff in Britain in dire jeopardy.
Whiley, said: ‘The high Street is facing a near-existential problem with intensifying and compounding pressures, most notably the high levels of rent and rates and the shifts in consumer behaviour from high street to online.
‘Despite changes over the last 18 months contributing to a significant reduction in net debt, Mothercare UK continues to consume cash on an unsustainable basis.’
It closed around 60 stores last year and sought further rent reductions before throwing in the towel on Monday.