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Mothercare to shut 50 stores as old chief exec brought back

Mothercare to shut 50 stores as old chief exec brought back

Past year it recorded a small operating profit after savings made from the closures of its Blackrock and Jervis Street stores in Dublin and the Cruises Street shop in Limerick.

The mums I met yesterday bought their baby stuff in the likes of Primark and the supermarkets. One of these, the Pension Protection Fund, has already said it will vote in favour.

Mothercare's shares had lost 83 percent of their value over the previous year but rose as much as 34 percent on Thursday after the firm detailed a 113.5 million pounds refinancing, including a 28 million pounds equity raise, and said Mark Newton-Jones would return as CEO.

The CVA Proposals and supporting management actions, once completed, are expected to result in a resized store estate with 50 stores to be exited, and material rent reductions on a further 21 stores, a stabilised financial performance through cost savings and/or eliminated losses, at least 10 million pounds cash inflow from store closures and working capital initiatives, further cost savings of at least 5 million pounds as the business is right sized and total store portfolio of 78 stores by FY20 and 73 in FY22 from 137 stores today.

He was given the boot by then-chairman Alan Parker, who has himself since stepped down.

Clive Whiley, Mothercare's interim executive chairman, said: "The recent financial performance of the business, impacted in particular by a large number of legacy loss-making stores within the United Kingdom estate, has resulted in an unsustainable situation for the Mothercare brand, meaning the group was in clear need of an appropriate resolution".

It is thought that David Wood, the former Tesco executive who had replaced Mr Newton-Woods, will shift to another position with the group, although it was not clear what this role would be this evening. It has more than 1,000 stores overseas, many of them operated as franchises.

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As part of the restructuring, Mothercare has also arranged a refinancing package worth up to £113.5m.

No specific details have been revealed as to stores facing closure.

Clive Whiley, Mothercare's interim executive chairman, said: "The recent financial performance of the business, impacted in particular by a large number of legacy loss-making stores within the United Kingdom estate, has resulted in an unsustainable situation for the Mothercare brand, meaning the group was in clear need of an appropriate resolution".

Other retailers to pursue CVAs this year include Carpetright, House of Fraser and New Look, while Toys R Us and Maplin have gone into administration.

It has also had to contend with surging wage costs and eye-watering business rate hikes.

He added that this has become more of an issue as the trading climate is now "so much more unforgiving".