May 20, 2018

Mothercare to shut 50 shops and restore CEO Mark Newton-Jones

17 May 2018, 06:41 | Melvin Schneider

Mothercare expected to announce shop closures tomorrow

British high street stalwart Mothercare is to shit 50 of its stores across the UK in a radical restructuring plan to save the mother and baby products retailer

Newton-Jones's miraculous return follows the departure of former chairman Alan Parker, who announced that he was stepping down in mid-April. Reports suggested Mr Whiley had been a key player in pulling together a rescue deal and forming the restructuring plans. Former Tesco executive David Wood who had taken on the chief executive role and is just over a month into the job, will become group managing director.

Struggling British mother and baby products retailer Mothercare (MTC.L) will close over a third of its United Kingdom stores as part of a survival plan that also sees the return of the chief executive who was sacked just five weeks ago.

The firm said it would seek creditor approval for company voluntary arrangement (CVA) proposals that would enable it to shut 50 stores and secure rent reductions on 21 others.

Over the past four years Mothercare has closed dozens of stores, taking its total from 200 outlets to 137 last year.

Mothercare chairman Clive Whiley said: "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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This is made up of a proposed equity capital raising of £28m expected to be launched in July 2018, a revised committed debt facilities of £67.5m, new £8m shareholder loans from certain of the company's largest shareholders and a new debtor-backed facility of up to £10m from one of the company's trade partners.

'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'.

Already this year Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality have moved into administration, while fashion retailer New Look and floor coverings retailer Carpetright are closing stores.

It has also had to contend with surging wage costs and eye-watering business rate hikes.

"These comprehensive proposals to create a fully refinanced, restructured business will allow an accelerated transformation of the business and are a crucial part of Mothercare's drive to a viable and sustainable future".

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