Mothercare will not confirm whether Ipswich, Clacton or Chelmsford are among 50 stores to close until ‘all staff have been informed’
PUBLISHED: 07:58 17 May 2018 | UPDATED: 09:08 17 May 2018
Mothercare has confirmed it is to axe 50 under-performing stories – however it will not comment on individual store closures until all staff have been informed.
The retailer, which employs 3,000 people across 137 outlets – including in Ipswich, Clacton, Chelmsford and Norwich – said the closures would be carried out through a company voluntary agreement(CVA).
The CVA, which allows companies to close loss-making shops and secure rental discounts, is expected to bring a £10m cash-flow for the company.
A Mothercare spokesman said: “We can’t comment on individual store closures until all staff have been informed, which is our absolute priority.
“Of course we regret having to close stores and the impact this will have on colleagues.
“However, we had no alternative to executing a CVA.
“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.”
As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.
Chairman Clive Whiley said: “The recent financial performance of the business, impacted in particular by a large number of legacy loss making stores within the UK estate, has resulted in an unsustainable situation for the Mothercare brand, meaning the group was in clear need of an appropriate resolution.
“These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare’s transformation.
“These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally.”
Since January, Toys R Us and Maplin have filed for administration while fashion retailers including New Look have embarked on store closure programmes.