Mothercare to close 50 stores with 800 job losses

Mothercare, the baby products retailer has confirmed it is closing 50 stores as part of a rescue plan that will put 800 jobs at risk, and the closures will leave only 78 outlets in the UK by 2020.

Initially, Mothercare, who hasn’t made a profit since 2012,  planned to have 92 outlets by 2023, and would not have just 73 by that year. The company lost £72.8m in the most recent financial year and was burdened with heavy charges to pay for closing stores and reorganising the business, as their sales fell by 1.3 per cent.

The customers are poundwise and bought their baby stuff in the likes of Primark and the supermarkets.

Mark Newton-Jones was sacked by the then chairman Alan Parker who also stepped down. Former Tesco executive David Wood is the new CEO  and will become Group Managing Director.

In a statement, Mothercare said: “Recent financial performance, impacted in particular by a large number of legacy loss-making stores within the UK estate, has resulted in a perilous financial condition for the group.”

After restructuring, Mothercare arranged a refinancing package worth £113.5m, which includes £28m raised through issuing new shares and an extension of its existing debt arrangements £67.5m, £18m in shareholder and trade partner loans. Mothercare employs about 3000 people across 137 outlets. Clive Whiley, Chairman, a turnaround specialist and long tern ass said: “These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally.”

According to one of the institutional fund managers in Mothercare said he had an extensive dialogue with Clive, who seems to have had a very positive impact.” As part of the fundraising plan, Mr Whiley rehired Mark Newton-Jones. Mothercare’s £725m international sales mostly run through franchises.