Nursery and maternity retailer Mothercare has revealed it will relocate its head offices and is in discussions with a number of new prospective lenders, as the business moves closer to appointing a new permanent chief executive.
The retailer went into administration in November 2019, resulting in 2500 job losses and 79 store closures. Since then it has been strengthening its global brand as it focuses on improving the ‘core competencies‘ of product design, marketing and distribution of Mothercare products for its global franchise partners.
As of 19 June 2020 Mothercare had a total secured debt of £18 million (including the group’s £24m revolving credit facility). It is still in discussions with new potential debt providers.
“We remain on track to become a profitable international franchise operation, generating revenues through an asset-light model, operating in around 40 international territories,” Mothercare said in an official statement.
“As with all businesses, the impact of Covid-19 and the associated actions from governments and corporations around the globe has had direct consequences for the Group and its various stakeholders… We currently estimate that approximately two thirds of our partners’ global retail locations are now open following local guidance in their respective territories.”
It was previously announced that Mothercare’s UK franchise deal with Boots has been delayed due to the coronavirus pandemic.
As part of its transformation, Mothercare also revealed that it will be making the move to a ‘smaller and more cost-effective’ head office in early August 2020, leaving the current Watford headquarters in mid-July.
“We have carefully managed our business over the past three months, to mitigate the impact of the Covid-19 pandemic on our cash flows and liquidity during this period of global crisis which is reflected in our unchanged bank debt position since March,” said Mothercare chairman Clive Whiley.
“Whilst we have not been immune to temporary store closures in almost all of our territories over the period, I am pleased that we are seeing the reopening of our partners’ stores. At the same time, we continue to take action to reduce our cost base and address legacy issues, helping with our return to being a profitable and sustainable business.”
Mothercare is also now shortlisting candidates for a permanent chief executive, after interim chief executive Glyn Hughes ruled himself out of the search.