Mothercare may be up for sale if last-mile financing fails

Sun, 08 Apr 2018 | BUSINESS SALE

Struggling baby and toddler clothing retailer Mothercare is fast running out of cash and believed to be investigating new avenues to raise finance quickly.

If these initiatives fail, it is near certain that the share price of Mothercare will spiral downwards, leaving the firm as easy pickings for retail vulture funds and entrepreneurs looking for distressed turnaround opportunities.

Mothercare has called in KPMG for restructuring advice and has been in talks with its lenders, including Barclays and HSBC about raising funding limits. It is believed the lenders have agreed temporary advances till May. It is possible they had a hand in the removal of CEO Mark Newton-Jones who was appointed to the position four years ago. Newton-Jones, who has spent his time trying to move the business more firmly into the online arena, was jettisoned suddenly last Wednesday and replaced with ex-Tesco man David Wood.

Online sales have not increased as fast as expected and indeed dropped 6.9 per cent over the Christmas quarter, nearly as bad as the 7.2 per cent fall in store sales over the period.

The cashflow crisis is believed to be at an emergency level with the talks at KPMG involving Mothercare entering into a company voluntary arrangement (CVA). In this scenario one of the obvious moves would be to immediately shut down loss-producing stores.

Founded by James Goldsmith and Selim Zilkhar in 1961, Mothercare has grown into a global business with over 1000 international franchises and 140 stores in the UK. The business recorded a £16.8m pre-tax loss in the half-year to October 2017, on sales of £340m.


Share this article



Latest Businesses for Sale

Online Strapping Retailer
Devon, UK Wide

This is an excellent opportunity for an interested and committed buyer to take on a highly reputable e-commerce business which specialises in strapping and other fastening equipment. Excellent online reputation. Wide range of stock. Loyal commercial...

Asking Price: £350,000
Turnover: £1,129,718

RELOCATABLE


Grocer & Florist
Hampshire, UK Wide

The business for sale is a dedicated retailer, providing warm and friendly customer service to ensure a satisfied and ever-increasing customer base. Great reputation with an established customer base. Well-established in the community, this business...

Asking Price: £150,000
Turnover: £400,000

LEASEHOLD


Online Electrical Appliance Sales & Repairs Superstore
West Midlands, UK

Very long established superstore with excellent e-commerce website offering extensive market-leading product range. Operates from spacious and superbly fitted triple parade showroom & workshop premises with huge volume of year-round 'walk in' trade o...

Asking Price: £995,000
Turnover: £330,834

FREEHOLD



View more businesses for sale

News Search

Latest News

 
29
 
May
 

Monsoon Accessorize close to administration | ADMINISTRATION

Fashion retailer Monsoon Accessorize is close to entering ad...

 
28
 
May
 

M&G completes purchase of Ascentric platform from Royal London | BUSINESS SALE

Asset manager M&G has completed the purchase of wealth manag...

 
27
 
May
 

Food-to-go supplier calls in administrators | ADMINISTRATION

Adelie Foods, one of Britain’s biggest suppliers of sa...

Free guide: 10 Biggest Buyer Mistakes

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

Email


Related News

 
22
 
May
 

Owner of Joe.co.uk enters administration | ADMINISTRATION

Joe Media Limited, the UK parent company of social news webs...

 
05
 
May
 

Byron Burger owner seeks to sell chain | BUSINESS SALE

Three Hills Capital Partners, the majority shareholder of re...

 
30
 
Apr
 

Central Building Contractors goes into administration | ADMINISTRATION

Glasgow-based Central Building Contractors has gone into adm...

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