Mothercare to swing axe on 50 stores and bring back sacked boss

Mothercare to swing axe on 50 stores and bring back sacked boss

In an attempt to save the company, Mothercare has entered into a company voluntary arrangement (CVA) to prevent the closure of all its retail stores.

Mothercare also plans to raise £28m from shareholders through a share placing while it has also extended £67.5m in debt facilities with lenders as well as arranging £18m in credit with investors and trade partners.

Mothercare has 13 stores in the region: Manchester Fort, Crown Point Denton - which has already lost its M&S Outlet this year - Stockport, Macclesfield, Altrincham, Warrington, Blackburn, Prescot, Preston, Aintree Racecourse Retail Park, Bromborough, Chester and Llandudno.

In another surprise move, Mothercare has reappointed Mark Newton-Jones, the chief executive who was sacked last month after a big fall in sales over the Christmas trading period and a profits warning.

That typically sees retailers closing stores and renegotiating rents, in return for a fresh injection of finance.

The retailer, meanwhile, stresses that its recent financial performance, impacted in particular by a large number of legacy loss making stores within the United Kingdom estate, has resulted in an unsustainable situation.

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"The business was in an unsustainable situation and was in clear need of an appropriate resolution and today's comprehensive measures provide a renewed and stable financial structure for the business, and will allow Mothercare to accelerate its adaptation to the shifting dynamic towards online".

"Since my appointment as interim executive chairman, my priority has been to galvanise support from all of our stakeholders and provide a solution to the short-term problems facing the company". It will have just 78 by 2020, down to 72 two years after that.

He continues: "The potential for the Mothercare brand in the United Kingdom, benefitting from a restructured store estate, and internationally remains significant".

Mothercare said that the process to implement the CVA Proposals is expected to complete in July 2018 with the CVA creditor meetings expected to be held on June 1, 2018.

Stores in Ashford and Sittingbourne have also shut in recent years.

Earlier this year, toy store chain Toys R Us collapsed into administration along with the electronics retailer Maplin.

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