UK-based mother and baby products retail chain Mothercare is reportedly targeting a new marketing boost in a bid to resurrect its business with the help of a CVA, that is expected to result in a huge number of store closures and job losses.
As a part of its CVA, the retailer is expecting to raise £ 32.5 million by issuing new equity to its existing shareholders as part of its CVA.
The retailer said that with the issuance of 170,871,885 new ordinary shares by way of a placing and open offer at a price of 19p per share, investors have taken up 77.9 per cent of the shares on open offer.
Earlier this month, Mothercare announced the closure of 60 stores which will result in around 900 job losses. The struggling retailer, however, is hopeful of a turnaround after its CVA process’ completion by next year. It’s UK region is expected to have 77 stores out of which 19 will be on reduced rent once the CVA process is done.
Additionally, the retailer is expecting to raise savings of around £ 19 million through the store shuttering process and hopes to raise £ 10 million out of it in cash.
Clive Whiley, Company’s interim Chairman, said, “Earlier this year the maternity and baby products retailer faced a bleak future with increasing financial stress upon the business and last month, a series of steps were taken to insert capital and restructure the operations.
“Looking at the current scenario of the retail sector, we know what needs to be done, as we move forward. We are shifting our focus on significant efficiencies and cost savings, along with areas of investment, both of which will support our revival in the market,” he added.
