Mothercare to Close Another 50 Stores
- Over one third of stores will close
- Job losses
- Huge closing down sales predicted
Mothercare is to cut 50 of its worst performing stores as part of a wide-ranging shake up, which also involves re-hiring the chief executive it sacked a few weeks ago.
The closures will result in hundreds of job losses, and will be carried out through a company voluntary arrangement, CVA.
A CVA allows companies to close loss-making shops and secure rental discounts in order to stay in business.
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Mothercare currently employs 3,000 people and has 137 outlets, meaning that over a third of these will be closing.
Mothercare also announced a refinancing package worth up to £113.5 million, which lenders and shareholders have given so the company can continue to run.
Clive Whiley, chairman of Mothercare, 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.”
Retailers across the UK have been battered by weak consumer confidence off the back of soaring inflation and stagnant wages.
Since January, Toys R Us and Maplin have filed for administration whiles fashion retailers such as New Look and Select have embarked on radical store closure programmes.
This does, however, mean that Mothercare will continue to have massive sales on across stores, even ones that aren’t scheduled to close, so it’s worth checking out your local one.