The loss of around a third of the company’s outlets by 2022 is with the aim of allowing Mothercare to return to a more stable footing, accelerate the transformation of the Group and drive it towards a viable and sustainable future. However, the move looks set to come with a loss of 800 jobs.
It remains unclear at this stage which of the 137 stores nationwide will be affected by the mass cull, but an answer is expected within the next 3 weeks.
The Island’s only Mothercare store is situated at Gunville, Carisbrooke having moved from Newport High Street several years ago.
The restructuring of the UK store portfolio is to be done through a company voluntary arrangement (CVA). It is a formal statutory procedure which enables a company to agree with its unsecured creditors a composition in satisfaction of its debts or an arrangement of its affairs which can determine how its debts should be paid and in what proportions.
Commenting on today’s Refinancing and UK Restructuring, Clive Whiley, the Company’s Interim Executive Chairman, 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. The potential for the Mothercare brand in the UK, benefitting from a restructured store estate, and internationally remains significant. 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 UK and internationally.”