900 JOBS NOW AT RISK AS MOTHERCARE CLOSES MORE STORES
PUBLISHED: 11:08 09 July 2018 | UPDATED: 13:31 09 July 2018
Mothercare is to close another raft of stores, meaning 60 of its outlets will be shut by June next year,.
The retailer said it was putting its Childrens World division into administration, but that 13 of these 22 stores would be saved.
The changes come after Mothercare cleared a restructuring plan known as a Company Voluntary Agreement (CVA), an insolvency procedure that required the approval of the retailer’s landlords.
The group has also undertaken a significant fundraising initiative to raise £32.5 million from its existing shareholders.
Mothercare has identified savings of £19 million through the process, and hopes to realise £10 million 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.
“We have worked tirelessly as a team to get to where we are today and this fully underwritten equity issue marks the end of this initial phase, returning the group to financial stability.”
Mothercare said it was not able to comment on whether individual stores in Norfolk and Suffolk were among those that will be shut down, and that: “the priority is speaking to those colleagues that are affected.”
Mothercare has stores in Ipswich, Clacton and Chelmsford, as well as in Norwich and Kings Lynn.
In morning trading, Mothercare’s shares were down 9% or 2.45p to 26.15p.
Mothercare fired its chief executive, Mark Newton-Jones, in April, but he was later brought back to see the business through its CVA.
Speaking about his dismissal, Mr Newton-Jones said: “I think it is probably fair to say I would like to have not left in the first place.
“I have come back to finish off what we started 4 years ago.”
He said the UK market was “frankly quite brutal” and that Mothercare was looking for opportunities to grow sales internationally.
In May, Mothercare unveiled a brutal set of annual results, swinging to a £72.8 million pre-tax loss in the year to March 24, which compares with a £7.1 million profit in 2017.
The store closures come at a dismal time for the high street.
Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look, Carpetright and others have embarked on radical store closure programmes.