British maternity and kid’s wear retailer Mothercare has announced the closure of 50 physical retail locations amidst a self-proclaimed ‘perilous financial state.’
This store shutters will be accompanied by the loss of a minimum 800 people’s jobs. Another more, shocking move from the label is the reinstating of recently fired Chief Executive Officer Mark Newton-Jones.
In addition to this, Newton-Jones’ replacement David Wood, will not exit the company but rather be promoted to the post of Group Managing Director.
Together, the duo will oversee Mothercare’s Company Voluntary Arrangement (CVA). This will let the firm ‘return to a more stable footing, accelerate the transformation of the group and drive it towards a viable and sustainable future.’
As a part of this reorganization, the group is planning to arrange a refinancing package of to £ 113.5 million. This comprises of issuing new shares (£28m), extending its pre-existent debt arrangements (£ 67.5m million) and borrowing (£ 10 million) from a ‘trade partner’.
Commenting on Mothercare’s haphazard strategy, Richard Hyman, independent retail analyst said, “Who has been leading the decision-making, to support the former chairman and his decision to appoint a successor and then a week later sacking the chairman? This is a publicly listed company and it’s ridiculous.”
At the moment, Mothercare runs a total of 137 retail outposts and employs some 3,000 staffers. However, even with the closing and restructuring, at least 10 more stores will have to close and more employee ejections will follow, according to industry experts.
Unless some stoic changes are made, Mothercare’s future might looks bleak as even in 2018 several kid’s brand retailers like Toys R Us and Maplin have fallen to administration.
