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

Fireplace & Stove Business
Buckinghamshire, UK Wide

Affluent trading area for the business. Demand in place to undertake servicing. Jobs booked in up to 6 months in advance. This is a retirement sale. Offers invited.

Asking Price: Offers Invited
Turnover: £431,410

Fish & Chip Shop
Ealing, London, UK

Popular fish and chip shop in busy West London area (W5). Highly populated area of Ealing. Trading has taken place here since 1996. Offers invited.

Asking Price: £175,000
Turnover: £425,129

Designer Ladies & Gents Fashion Retailer
Bawtry, Yorkshire and the Humber, UK

Established since 1986. Parking available directly outside. Exclusive Designer brands in stock. Offers invited.

Asking Price: £250,000
Turnover: £1,307,349


View more businesses for sale

News Search

Latest News

 
19
 
Jul
 

Outdoor activity centre completes MBO | BUSINESS SALE

An outdoor water activity centre has been successfully sold ...

 
18
 
Jul
 
 
17
 
Jul
 

Preston caravan manufacturer seeks buyer following administration | ADMINISTRATION

A caravan manufacturing business in Preston is on the lookou...

Free guide: 10 Biggest Buyer Mistakes

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

Email


Related News

 
09
 
Jul
 

Assets for sale as engineering firm appoints administrators | ADMINISTRATION

An engineering firm based in South Yorkshire has fallen into...

 
26
 
Jun
 

'All options' being explored for collapsed Welsh cheese maker | ADMINISTRATION

A cheese-making factory in Snowdonia has collapsed into admi...

 
02
 
Apr
 

Administrators appointed at Yorkshire engineering firm | ADMINISTRATION

An engineering contractor from West Yorkshire has been force...

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