Mothercare has announced that it would close another nine stores as part of its CVA after it placed its Childrens World fascia into administration.
The new store closures mean a total of 60 stores from across the Mothercare group will now be shut by June next year, potentially leading to 900 job losses.
Its CVA plans, which were approved by creditors at the start of June, originally had around 50 stores earmarked for closure and 800 job risk placed at risk.
The new store closures came about after the CVA proposal in respect to its Childrens World fascia did not receive the required support from creditors.
This prompted Childrens World directors to place the retailer into administration, resulting in the transfer of 13 of its 22 stores to other Mothercare group operations to continue trading.
In a statement released this morning, the retailer said it has so far “made good progress” with the refinancing and restructuring plans set out in its CVA and was now able to update on the final stages of this process.
This includes a fully underwritten equity issue to raise £32.5 million from Mothercare’s existing shareholders, to be effected by way of a one-for-one placing and open offer at 19p per new ordinary share.
Mothercare’s lenders have also revised debt facilities of £67.5 million which remain conditional upon, among other things, the completion of the equity raise.
The retailer added that once its CVA process was complete by June next year, its UK estate will have 77 stores, with 19 of those stores on reduced rent.
Meanwhile, Mothercare’s efficiency and cost savings initiatives have now identified cost savings totalling £19 million.
Mothercare’s interim executive chairman Clive Whiley said: “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.
“We have also identified significant areas for further efficiencies and cost savings, which will underpin our return to a sustainable future.
“The last three months of hard work and progress have put in place the foundations to get Mothercare back to where it should be as a fit-for-purpose business with a stronger and more efficient structure both for our UK business and our international franchisees.”
Chief executive Mark Newton-Jones said: “After a very challenging period for our business, we have now finalised arrangements to restructure and refinance the group, ensuring that the transformation of the Mothercare brand we started four years ago can now be completed.”
He 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.”