Mon, 09 Jul 2018 | ADMINISTRATION
Mothercare has added another nine store closures to its CVA after placing its Children’s World division in administration.
This comes as a result of its creditors failing to provide adequate support, which has forced the Mothercare group to shut nine of 22 Children’s World stores and transfer the remaining 13 to other group operations to stay trading.
The company voluntary arrangement (CVA) will allow Mothercare to shut its unprofitable shops, and attain reduced rents. However, the Children’s World administration has forced the group to earmark the closure of 60 stores by June 2019, which is expected to effect up to 900 retail jobs.
Mothercare’s interim executive chairman, Clive Whiley, said: “The last three months of hard work and progress have put in place the foundations to get Mothercare back to where it should be as a fit-for-purpose business with a stronger and more efficient structure both for our UK business and our international franchisees.”
Whiley added that a full assessment of the businesses has alerted the company to further avenues for efficiency and cost-savings amounting to £19 million, which will allow Mothercare to sustain a profitable future.
The group is also expecting issue new shares and raise £32 million from its shareholders.
Mark Newton-Jones, Mothercare’s chief executive, said: “After a very challenging period for our business, we have now finalised arrangements to restructure and refinance the group, ensuring that the transformation of the Mothercare brand we started four years ago can now be completed.
“I’m pleased to say however, that we are now in a position to re-focus on our customers and improve the Mothercare brand both in the UK and across the globe.”
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