Mothercare confirms store closures amid insolvency

Tue, 22 May 2018 | ADMINISTRATION

Mothercare has reinstated its former chief executive Mark Newton-Jones and announced plans to close 50 stores amid the delivery on an insolvency rescue package.

According to the retailer, it plans to push forward its store closure plans in a bid to gain £113.5 million of funds through the removal of 50 sites. Additionally, this refinancing will be supported by the pursuit of a Company Voluntary Arrangement (CVA), a form of insolvency that will allow the company to secure rent reductions to reduce outgoings.

This move, which is becoming popular with high street companies, will also buy the company more time to trade and avoid going into administration while potentially searching for a buyer, according to Simon Underwood, business recovery partner at Menzies LLP.

"Allowing a business to continue trading and its existing management to retain control, CVAs are sometimes viewed as a more attractive option than other methods of insolvency, such as pre-pack administrations," said Mr Underwood.

"However, if all struggling retailers start taking this route, it could make matters worse for the ailing High Street – with more shoppers moving online and creating more empty stores.

The decision to pursue insolvency has also been taken by other large high street brands, including Toys R Us, Carpetright and Prezzo, all of which have closed a number of their stores in a bid to save money while they seek reductions in rents and other overheads.

Commenting on Mothercare's decisions moving forward, the firm's chairman Clove Whiley, added: "These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally."


Share this article



Latest Businesses for Sale

Butchers
Dagenham, Essex, South East, UK

The business sells a great selection of meats, cooked meats, a range of seasoned sausages and burgers all prepared in-house. Revenue is derived from the sale of quality fresh produce, supplied from reputable sources. The business sees a lot of repeat...

Asking Price: Offers Invited
Turnover: £852,000

LEASEHOLD


Furniture Retailer
County Durham, UK Wide

The business offers a wide range of quality furniture made from materials such as solid oak, solid pine, Indian hardwood, reclaimed wood, veneers, foils and more. A wide variety of different products are displayed in a traditional and contemporary st...

Asking Price: Offers Invited
Turnover: £550,000

LEASEHOLD


Butchers With Modern Bakehouse
Kirkcaldy, Fife, Scotland, UK

Fantastic opportunity to acquire, on a freehold basis, this long standing and well respected traditional local butchers. Thomson of Thornton has been family owned for over 50 years and has built an excellent local reputation for quality and service a...

Asking Price: £600,000
Turnover: £600,000

FREEHOLD



View more businesses for sale

News Search

Latest News

 
15
 
Nov
 

Carpetright agrees to shareholder takeover deal | BUSINESS SALE

Carpetright has agreed a deal to be taken over by its larges...

 
14
 
Nov
 

Scale manufacturer taken over in MBO | MBO/MBI

Weighing scale manufacturer Marsden Weighing Group has been ...

 
13
 
Nov
 

Brighton energy firm appoints administrators | ADMINISTRATION

Brighton-based utilities company Toto Energy has gone into a...

Free guide: 10 Biggest Buyer Mistakes

Sign up to receive our acquisition alert emails to get your FREE guide

Email


Related News

 
05
 
Nov
 

Mothercare to appoint administrators | ADMINISTRATION

Baby products retailer Mothercare has announced that it will...

 
31
 
Jul
 

Mothercare poised to announce plans for division sale | BUSINESS SALE

Mothercare has revealed that it is close to announcing plans...

 
09
 
Jul
 

Mothercare store closure puts Children’s World in administration | ADMINISTRATION

Mothercare has added another nine store closures to its CVA ...

Want access to the latest businesses for sale?

Business Sale Report is your complete solution to finding great acquisition opportunities.

Join today to receive:

  • Comprehensive range of businesses for sale
  • Make direct contact with business sellers or their intermediaries
  • Access to all UK administrations, liquidations and winding-up petitions
  • Daily email alerts for the latest businesses for sale & distressed notifications
  • Business Sale Report publication posted to you every month
  • Advertise your acquisition requirements on our "business wanted" section

All this and much more, including the latest M&A news and exclusive resources