Mothercare calls in administrators

04 Nov 2019

Struggling Mothercare UK Plans to Call in Administrators

Mothercare has lined up administrators ahead of a restructure in their UK business. Up to 2,500 jobs could be at risk, as yet another retailer falls victim to the turbulent high street environment.

While the maternity, baby and child goods retailer says it’s business as usual at the 79 stores across the UK, it also claims that the network of branches is “not capable of returning to a level of structural profitability and returns that are sustainable for the group.”

Outside of Great Britain, Mothercare has a presence in over 50 countries and international business brought in profits of £23.8m in the last financial year. Whereas the UK arm made a loss of £36.3m. Only Mothercare UK Limited and related service provider Mothercare Business Services Limited (MBS) are subject to administration.

A spokesperson from Mothercare has said:

“These notices of intent to appoint administrators in respect of Mothercare UK and MBS are a necessary step in the restructuring and refinancing of the Group… Plans are well advanced and being finalised for execution imminently.”

In what has been a tumultuous period for the retailer, Mothercare’s UK business has so far failed to secure a new buyer. Last year, a Company Voluntary Agreement saw the closure of over 50 stores in attempt to keep the troubled retailer afloat. This rescue attempt came after Chief Executive Mark Newton Jones was ousted from the business, only to be reinstated 44 days later.

In the months that followed, the business sold of its head office and also the Early Learning Centre. Despite raising £32.5m through the sales of shares, the retailer’s market value is currently less than £39m.

Analysts suggest that Mothercare has struggled to keep up with competition and the rise of online shopping. The retailer, that opened its first store in 1961, joins a growing list of high street chains that are fighting what appears to be a losing battle against the current high street climate.

Mothercare has confirmed that they will make a further announcement in due course.

By Melissa Jones