trending Market Intelligence /marketintelligence/en/news-insights/trending/ldbisdtenuofrgpuzuzoza2 content esgSubNav
In This List

Mothercare to close 50 UK stores, rehire former CEO

Blog

Using ESG Analysis to Support a Sustainable Future

Video

S&P Capital IQ Pro | Powered by Expert Insights

Blog

Q&A: Streamlining Analytics for TCFD Reporting

Blog

Evergrande and the wider impact: a sentiment analytics based perspective


Mothercare to close 50 UK stores, rehire former CEO

U.K. retailer Mothercare PLC said on May 17 that it would close 50 stores and seek better terms for leases at 21 others as part of its financial restructuring. It also announced that it had rehired the CEO who left abruptly on April 4, 2018.

The company, which sells products for mothers-to-be, babies and children, said it would reduce the size of its store portfolio from 137 shops to 78 by 2020 and 73 by 2022.

It also announced a refinancing to provide up to £113.5 million, comprising £28 million from a proposed equity capital raising, £67.5 million in revised debt facilities with a maturity date extended to December 2020, £8 million in shareholder loans and up to £10 million in loans from a trade partner.

Creditors are due to vote on the proposals June 1, and the equity issue, if approved, would be completed by mid-July, the company said.

Mothercare's finances have suffered due to its inability to keep up with the ever-changing dynamics and shopping patterns of its customers. "The continued decline of U.K. high street footfall and our inflexible and deep store cost base, alongside the ever-growing importance of multichannel retailing, presented significant and worsening challenges to our business model with our current number of stores in the U.K.," it said in its statement.

In a separate announcement, the company reported that diluted adjusted earnings per share in the 52 weeks to March 24, 2018, swung to a loss of 0.8 pence from a profit of 9.3 pence a year earlier as sales shrank to £654.5 million from £667.4 million.

Mothercare is restructuring its business under the terms of a company voluntary agreement, a process that allows it to clean up its finances without the need for a bankruptcy filing.

Mark Newton-Jones, who stepped down from his role as CEO on April 4, had agreed to return to his post, subject to contract, the company said.

David Wood, who succeeded Newton-Jones on April 4, will become group managing director.