Mothercare is said to be considering closing loss-making stores and slashing rents as it tries to survive conditions on the high street.
The retailer, which parted ways with its chief executive of four years last week, is understood to be exploring an insolvency process known as a company voluntary arrangement (CVA). A property source said that Mothercare could seek to shut up to a third of its 143 stores through a CVA. If it goes ahead, it would be expected to use the accountant KPMG, which is already advising on an emergency refinancing.
Mark Newton-Jones, the former Shop Direct boss, tried to turn Mothercare into a digital retailer. Although more than 40% of its trade now comes through the internet, online sales fell by 6.9% over the Christmas quarter and store sales fell by 7.2%. Newton-Jones was ousted abruptly last Wednesday and replaced by David Wood, a former Tesco executive who was most recently president of the Kmart chain in America.