Mothercare has earmarked another 10 stores for closure as part of its CVA bringing the total to 60 stores, after the group’s Childrens World division entered administration.
The new store closures mean that up to 900 jobs will be lost by June 2019. The news comes after the CVA proposal in respect to Childrens World did not receive enough votes from creditors.
Mothercare also announced that 13 of the 22 Childrens World stores will be transferred to other Mothercare group companies to continue trading, and said the babywear retailer also plans to raise another £32.5m from its existing shareholders by issuing new shares.
The money will be raised by way of a one-for-one placing and open offer at 19p per share and is expected to complete on 27 July 2018.
Commenting on the future outlook of the company Mothercare said that current trading continues to “follow the patterns seen in the second half of the last financial year, with challenging conditions in the UK”.
Clive Whiley, interim executive chairman said that when he joined the business three months ago the company had a “bleak future” but after the initial phase of refinancing the group has returned to “financial stability”.
He said: “We have worked tirelessly as a team to get to where we are today and this fully underwritten equity issue marks the end of this initial phase, returning the group to financial stability. This could not have happened without the support of all of our stakeholders for which we are very grateful.
“Alongside the fundraising, we have been very busy on numerous fronts to restructure the Group for future profitability. Whilst the lack of full approval for the Childrens World CVA was disappointing, we have now found a solution which allows us to go further and faster with the right-sizing of our store portfolio.”
Mark Newton-Jones, CEO added: “We have seen an unprecedented period for UK retail and we have not been alone in facing a number of strong headwinds. I’m pleased to say however, that we are now in a position to re-focus on our customers and improve the Mothercare brand both in the UK and across the globe.
“We have exciting plans ahead to revitalise the brand through enhancing our product ranges, improving our design and value, developing our digital and multi-channel proposition and investing in our people. Our goal remains clear, to be the leading global specialist for parents and young children.”