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Mothercare Ireland distances itself from troubled namesake after 50 store closures

17 May, 2018, 15:52 | Author: Joan Malone
  • Mothercare stores closing

The child and baby care retailer has also secured £113.5mln in financing, while it is bringing back its former chief executive who left in the wake of March's profit warning.

Mothercare will re-hire its former boss in a shocking U-turn as the company plans to shutter 50 stores.

Troubled high street retailer Mothercare plc (LON:MTC) has unveiled plans to close nearly half of its stores over the next four years as part of its turnaround strategy.

Commenting on the plan Jonathan Ward, Managing Director of Mothercare Ireland said in a statement: "Mothercare UK have this morning released their refinancing and UK store restructuring plan".

Shares in Mothercare were up 4.8 pence at 26.6 pence at 0832 GMT, valuing the business at 46 million pounds.

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

"The business was in an unsustainable situation and was in clear need of an appropriate resolution and today's comprehensive measures provide a renewed and stable financial structure for the business, and will allow Mothercare to accelerate its adaptation to the shifting dynamic towards online".

The plan to close stores and cut rents at 21 of its stores.is being carried out through a company voluntary arrangement (CVA).

Mothercare now trades from 137 United Kingdom stores but aims to reduce that to 78 by 2020, meaning a further nine stores would close beyond this initial programme.

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.

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