Mothercare confirms plans for administration

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Mothercare confirms plans for administration
Mothercare says its subsidiaries Mothercare UK and Mothercare Business Services will trade as normal 
// Mothercare announces that notices of intent to appoint administrators are being filed with the court today
// These pertain to Mothercare’s UK retail businesses and business services subsidiary
// Mothercare’s other subsidiaries are not covered by these notices of intent

Mothercare has announced that it will file notices of intent to appoint administrators with the court today, less than 18 months after it launched a CVA.

The notices pertain to Mothercare’s businesses services subsidiary and its UK retail business, which has 79 stores.

Although Mothercare said the two affected subsidiaries will trade as per usual, the plans to put its UK retail businesses into administration places hundreds of jobs at risk.

The maternity retailer stressed that all other aspects of the company – such as its profitable international division – are not covered by the notices of intent.


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The news comes after Mothercare drafted in restructuring experts from KPMG last week to assess options for its UK business.

In addition, in June last year creditors approved a CVA that saw Mothercare eventually shut down 55 stores.

Mothercare recorded an overall loss before tax of £87.3 million for the 53 weeks to March 30, as fourth quarter like-for-like sales fell by 8.8 per cent.

When split, the retailer generated profits of £28.3 million internationally whereas its UK retail operations recorded a loss of £36.3 million.

In the the 15 weeks to July 13 this year, total group sales at Mothercare fell once again, this time by 9.2 per cent.

Mothercare re-iterated that its key strategic aim this financial year was to progress the next phase of its transformation scheme and to “optimise the level of sustainable long-term revenues”.

This entailed a financial structure for the whole of the Mothercare Group – which it said “maintains a sustainable business model with a capacity to secure future growth” – as well as optimising its UK retail operations.

However, Mothercare conceded that its UK retail business was not profitable enough and that its intent to appoint administrators was “a necessary step in the restructuring and refinancing” of the overall company.

“Since May 2018, we have undertaken a root and branch review of the group and Mothercare UK within it, including a number of discussions over the summer with potential partners regarding our UK Retail business,” Mothercare said in a statement.

“Through this process, it has become clear that the UK retail operations of the group, which today includes 79 stores, are not capable of returning to a level of structural profitability and returns that are sustainable for the group as it currently stands and/or attractive enough for a third party partner to operate on an arm’s length basis.

“Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK.”

Mothercare said another announcement will be made in due course after the intents have been filed with the court today.

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1 COMMENT

  1. Just wondering why did the Plymouth city centre store close, and then you move into brand new large out of town shed on a new retail park within the past 6 months?
    If you knew you were in troubled times why commit to such a site?
    I do have to query the leadership decision process!

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