The baby products business has become the latest in a string of retail brands to pursue a Company Voluntary Arrangement, announcing today that it intends to close 50 stores in a move that threatens 800 jobs.
Efforts to bring down its 137-strong United Kingdom store estate to around 87 stores and secure rent reductions on a further 21 sites will be pursued through a Company Voluntary Arrangement (CVA), a type of insolvency process which helps firms that are under fire to survive by curtailing their costs.
A statement issued by Mothercare said: "We can't comment on individual store closures until all staff have been informed, which is our absolute priority".
Mark Newton Jones is to return to the role after being asked to leave in April, following a period of poor profits.More news: US Warns Russian-German Gas Pipeline Risks Triggering Sanctions
THE Mothercare store at Bradford's Forster Square Retail park has been included on a leaked list of stores likely to shut in the next year.
Mothercare Ireland is a completely separate company and as a result, our 15 Irish stores are unaffected by any plans in the proposal and will continue to trade as normal. It is aiming to have a portfolio of 78 shops by its 2020 financial year and 73 in 2022.
As part of the restructuring, Mothercare has also revealed a £113.5million finance package, which includes £28million through equity capital, and extension of its existing debt to £67.5 million.
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.More news: Deadpool 2: The merc with the mouth returns
"However, there remains much to do and we must maintain a disciplined focus on cost control and cash generation throughout the business, but these measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the United Kingdom and internationally".
Brutal trading conditions for store groups - with pressure on British disposable incomes compounding intense competition - are also partly responsible for the collapse of Toys R Us British, electricals group Maplin and drinks wholesaler Conviviality.
Shares in Mothercare were up 4.8 pence at 26.6 pence at 0832 GMT, valuing the business at 46 million pounds.
"The business was in an unsustainable situation and was in clear need of an appropriate resolution".More news: Ratas attending EU-Western Balkans summit in Sofia
"These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the United Kingdom and internationally".
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