Nursery and maternity retailer Mothercare has announced that it will be closing 60 of its 137 UK stores as it updated on the final stages of its restructuring and refinancing plans.
The move – which will see Mothercare close 10 more stores than previously planned – comes after landlords rejected the company’s proposals for rent reductions across its Children’s World stores last month. The additional closures are mainly as a result of the Children’s World subsidiary now entering administration.
The restructure will be carried out through a company voluntary arrangement (CVA), which allows firms to shut loss-making shops and reduce rents. It has received full backing from the retailer’s creditors.
The closures will see Mothercare cut around 900 jobs and make annual savings of about £10m. The retailer also plans to raise £32.5m from existing shareholders by issuing new shares.
Clive Whiley, the group’s interim executive chairman, said: “While the lack of full approval for the Children’s World CVA was disappointing, we have now found a solution which allows us to go further and faster with the right-sizing of our store portfolio. We have also identified significant areas for further efficiencies and cost savings, which will underpin our return to a sustainable future.”
“After a very challenging period for our business, we have now finalised arrangements to restructure and refinance the group,” added chief executive, Mark Newton-Jones, “ensuring that the transformation of the Mothercare brand we started four years ago can now be completed.”
“Mothercare is a great British brand with over 50 years of heritage and we now have the financing in place to take it forward for many more years to come,” he continued. ““We have exciting plans ahead to revitalise the brand through enhancing our product ranges, improving our design and value, developing our digital and multichannel proposition and investing in our people.”
Mothercare will have a UK store estate of 77 stores by June 2019, with 19 of those stores on reduced rent.