Mothercare puts nine stores and 100 jobs at risk
● Further outlet closures and job cuts announced ● Group hoping to raise £23.5m from shareholders
Mothercare has announced it will close a further nine stores, leading to the loss of around 100 additional jobs.
This latest batch of closures means a total of 60 Mothercare stores will shut down by June next year, jeopardising 900 jobs.
In an update released yesterday, the high street retailer announced it was putting its Childrens World division into administration, although it would retain 13 of these 22 stores.
The company has cleared a restructuring plan known as a company voluntary agreement (CVA), an insolvency procedure that requires the approval of the retailer’s landlord, for Mothercare UK and The Early Learning Centre. However, a proposed CVA for Childrens World was rejected when it did not receive the required support.
The group will also undertake a significant fund-raising initiative to raise £32.5 million from its existing shareholders.
The business reported it had identified savings of £19m and is hoping 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. Alongside the fund-raising, we have been very busy on numerous fronts to restructure the group for future profitability.
“Whilst the lack of full approval for the Childrens Worldcvawasdisappointing, we have now found a solution which allows us to go further and faster with the right-sizing of our store portfolio.
“We have also identified significant areas for further efficiencies and cost savings, which will underpin our return to a sustainable future.
“The last three months of hard work and progress have put in place the foundations to get Mothercare back to where it should be as a fit for purpose business with a stronger and more efficient structure both for our UK business and our international franchisees.”
CEO Mark Newton-jones said: “Mothercare is a great British brand with over 50 years of heritage and we now have the financing in place to take it forward for many more years to come.
“We have seen an unprecedented period for UK retail and we have not been alone in facing a number of strong headwinds.”
In May this year, Mothercare released annual results showing a £72.8m pre-tax loss in the year to 24 March, compared with a £7.1m profit in 2017.
Other high street retailers suffering financial difficulties include Toys R Us and Maplin, which have filed for administration, as well as fashion chain New Look and carpet retailer Carpetright which have each started store closure programmes.