Mothercare is reportedly mulling the possibility of entering a company voluntary arrangement (CVA) as it looks to reduce costs by shutting one third of its stores and lowering rents.
According to The Sunday Times, if a CVA is agreed with lenders the retailer could close around 47 of its 143 stores.
The news comes less than a week after it appointed former Kmart and Tesco executive David Wood to be its new chief executive, effectively forcing out Mark Newton-Jones.
Sources speaking to the Retail Gazette said Mothercare’s board was not happy with the progress Newton-Jones was making with its turnaround strategy and had been considering a replacement for some time.
This leadership change and reports of a CVA comes amid torrid times for the retailer, which last month called in KPMG to help it renegotiate waivers on its loans and assess its options.
Although it launched a transformation plan under Newton-Jones, it has been struggling to stay afloat since the tail end of 2017 when it reported losses of £700,000 in its interim results.
Mothercare’s CVA means it would join a fast-growing list of high street retailers opting for one since the start of the year.
New Look and Select are currently in the midst of CVAs while Carpetright is also considering the process.
Toys R Us underwent a CVA shortly before it collapsed and Maplin is on the verge of following suit.
Meanwhile, off-licence and alcohol retail company Conviviality appointed administrators last week but most of the business appears to have been rescued from buyers.