Mothercare confirms 50 closures in rescue plan

Mothercare says 50 of its stores are to close

Mothercare says 50 of its stores are to close

The company intent to bring back Mark Newton-Jones as chief executive as part of the plan to be unveiled on Thursday. Reports suggested Mr Whiley had been a key player in pulling together a rescue deal and forming the restructuring plans.

Former Tesco executive David Wood, who was drafted in to replace Newton-Jones, will become group managing director.

"These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare's transformation". Mothercare has 13 stores in the region: Manchester Fort, Crown Point Denton - which has already lost its M&S Outlet this year - Stockport, Macclesfield, Altrincham, Warrington, Blackburn, Prescot, Preston, Aintree Racecourse Retail Park, Bromborough, Chester and Llandudno.

It expects to have a total store portfolio of 78 by 2020, down from the current 137 stores.

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The company further added that the United Kingdom restructuring plan will involve an accelerated reduction of the United Kingdom store estate to reduce losses and rent liabilities and will be effected through the CVA Proposals.

"Mothercare UK have this morning released their refinancing and UK store restructuring plan".

Brutal trading conditions for store groups - with pressure on UK disposable incomes compounding intense competition - are also partly responsible for the collapse of Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality.

The CVA, as is standard, will need the support of its creditors.

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As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.

The Hertfordshire-headquartered retailer will close 50 stores and will slash rent on a further 21. "However, there remains much to do and we must maintain a disciplined focus on cost control and cash generation throughout the business, but these measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the United Kingdom and internationally".

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

In addition to the proposed equity issue, Mothercare has secured revised committed debt facilities of 67.5 million pounds, 8 million pounds of new shareholder loans and a new facility of up to 10 million pounds from a trade partner.

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