Mothercare announces closure of 60 stores resulting in loss of 900 jobs

UK-based maternity and kids wear retailer Mothercare has announced to shutr 60 stores and cut 900 jobs exceeding the company’s expectation of 50 stores and 800 jobs. The decision has come after landlords rejected the company’s proposals for reductions in rent for Children’s World stores in June 2018. The store count of the retailer will come down to 77 from 137, after majority of Children’s World stores are shutdown. The closure will be carried out through a company voluntary arrangement (CVA), that enables the firms to close loss-making shops and secure rental discounts.

Reportedly, the retailer is anticipating an annual savings of around £ 10m with the store closure, and further aims to generate £ 32.5 million from its existing shareholders with a completely underwritten equity issue.

Clive Whiley, Interim Executive Chairman, Mothercare, said that whilst the lack of full approval for the Children’s World CVA was disappointing, the company has now found a solution which allows the retailer to go further and faster with the right-sizing of its store set. “We have also identified significant areas for further efficiencies and cost savings, which will help us get back on track towards a sustainable future,” added Whiley.

Furthermore, the reinstated CEO, Mark Newton-Jones elucidated that the retailer is now in a position to re-focus on its consumers and enhance the brand both in the UK and around the world. “We will look to enhance our product collections, improve our design and value, and create our multi-channel offerings,” he concluded.