Reports indicate CEO Mark Newton-Jones proposed taking the retailer private before his departure in April.
Mark is said to have proposed a management buyout to the board of the baby-goods retailer. The option was one of a number of proposals considered and wasn’t pursued further, according to people familiar with the matter. The shares fell as much as 14%.
Mothercare has had a tumultuous few months. Mark was ousted by Chairman Alan Parker in April, who himself departed just weeks later. Mark was then rehired as CEO this month by Alan’s successor, with a salary cut of 22%.
“As you would expect, at certain points the board considers various strategic options available to the company,” Mothercare said in an emailed statement. “However, no specific plans were drawn up in relation to an MBO. The business is focused on implementing the comprehensive measures announced last week to provide a renewed and stable financial structure for the business and to drive a step change in Mothercare’s transformation.”
After a dismal holiday season, Mothercare arranged a package to raise as much as £114m by selling debt and shares. The retailer also plans to close 50 stores and lower rents at 21 other locations.
Mothercare shares were down 12.7% as of 4:10pm yesterday (Wednesday) in London, extending this year’s drop to 50%.