Mothercare store closures are likely to affect hundreds of jobs – while the retailer has re-hired its CEO after sacking him just weeks ago.
The closures, which will result in hundreds of job losses, will be carried out through a CVA. Mothercare employs about 3,000 people across 137 outlets.
In a bizarre move, Mark Newton Jones, who was sacked last month, will return to the fold and once again take the role of CEO. The man that had been brought in to replace him, David Wood, will now become managing director.
As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5m. It comprises £28m through an equity capital raising, an extension of its existing debt to £67.5m, £18m in shareholder and trade partner loans.
Chairman Clive Whiley commented: “The recent financial performance of the business, impacted in particular by a large number of legacy loss-making stores within the UK estate, has resulted in an unsustainable situation for the Mothercare brand, meaning the group was in clear need of an appropriate resolution. These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare’s transformation. These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally.”