Mothercare drafts in KPMG to avoid collapse

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Mothercare store closures

Mothercare’s share prices have seen a slight recovery after it drafted in accounting firm KPMG to help it avoid falling into liquidation.

KPMG have been appointed by the embattled retailer to help it negotiate waivers on its loan agreements and secure funds to launch a turnaround.

This has seen it share prices climb after dive-bombing earlier this month when the retailer announced its adjusted group profit before tax forecast would come in at the lower end of the previously guided range of £1 million to £5 million.

The retailer has been struggling to stay afloat since late last year when it revealed losses of £700,000 amid its interim results. In the Christmas shopping period following this announcement Mothercare also failed to perform, leading to two profit warnings this year and an overall 76 per cent drop in its share prices.

It is understood that Mothercare already refinanced with its creditors Barclays and HSBC last summer, altering its £50 million credit facility to a £62 million revolving credit facility, which is due to mature in November.

We are also exploring additional sources of financing to support and maintain the momentum of our transformation programme,” a spokesperson said.

All of these discussions are ongoing.”

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