Mothercare Ireland has entered interim examinership, a form of insolvency protection.
The company stated: “This is a process that will allow the company the opportunity to restructure and in particular address the key issue of unsustainable high rents in its stores.”
There are currently 18 stores run by the franchisee which employs 276 staff. If leases in unprofitable stores cannot be renegotiated, it is likely these stores will close and lead to numerous job losses through redundancy.
David Fitzsimons, CEO, Retail Excellence Ireland, said: “It is a fact that many landlords are seeking to impose Celtic tiger rents on struggling retailers. The domestic economy remains in a fragile state and these rents are simply untenable. Between 2000 and 2007 commercial rents increased by 240% while over the same period consumer prices increased by 30%. We implore landlords to charge rents which reflect market conditions. If landlords do not take a common sense approach many retailers will fail.”
During the examinership, Mothercare will continue to honour gift cards, gift vouchers, deposits and points on its Family Card loyalty scheme.