Mothercare plans store closures to revive sickly UK child

Mothercare

Britain's Mothercare, the struggling mother and baby products retailer, said on Thursday it would close 50 more stores as part of a survival plan that would also see it ask shareholders for 28 million pounds ($38 million) in an equity raise.

Family-run business Mothercare Ireland may have the same name but it is a wholly separate entity and the Ward family - who acquired the company in 1992 - have been quick to clarify reports in the Irish press linking the two.

Mothercare now trades from 137 United Kingdom stores, having had almost 400 a decade ago.

And after today's news, the chain will operate just 73 stores by 2022.

Mothercare Ireland was forced to close three shops in 2015 as financial troubles forced the company to go into examinership.

Mothercare employs about 3,000 people across 137 outlets in the United Kingdom, including branches in Telford, Walsall, Stafford and at Merry Hill shopping centre.

The plans would see it shrink from 137 stores today to 78 in two years' time and 73 in 2022 - down from a United Kingdom network of more than 400 stores in 2007 shortly after it bought the Early Learning Centre chain.

The plan to close stores and cut rents at 21 of its stores.is being carried out through a company voluntary arrangement (CVA).

The shake-up aimed at restoring the fortunes of the chain are likely to result in hundreds of job losses.

Mothercare declined to comment though it is now confirmed that Newton-Jones, who stepped down as CEO in April, a month after Mothercare warned on full-year profit, is to return to the firm.

"These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare's transformation".

Mothercare, which has been trading since 1961, said it was facing a "perilous financial condition" and had identified a large number of loss-making stores.

As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.

Creditor meetings to vote on the CVA proposals are expected to be held on June 1, with the process expected to complete in July.

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