Mothercare to close 50 stores with area's shops and jobs at risk
Mothercare located at Kingston Retail Park
By Hull Daily Mail | Posted: 17 May 2018
Mothercare has announced the closure of 50 stores as part of a wide-ranging shake up to keep the struggling firm alive.
Underperforming stores will shut over the next 12 months resulting in hundreds of job losses with the closures carried out through a company voluntary arrangement (CVA).
It is not yet known which shops will close at this stage but the children's clothing brand has released a statement this morning.
Mothercare has stores at Hull's Kingston Retail Park and Scunthorpe's Lakeside Retail Park.
A spokesman said: "We can’t comment on individual store closures until all staff have been informed, which is our absolute priority. Of course we regret having to close stores and the impact this will have on colleagues.
"However, we had no alternative to executing a CVA. The business was in an unsustainable situation and was in clear need of an appropriate resolution and today’s comprehensive measures provide a renewed and stable financial structure for the business, and will allow Mothercare to accelerate its adaptation to the shifting dynamic towards online."
Mothercare employs 3,000 people across 137 outlets. As part of the restructuring, the firm has announced a refinancing package worth up to £113.5m and it has also made a U-turn on a key member of staff.
Mark Newton Jones, who was given the elbow as chief executive last month, will return to the fold and once again take the top job.
The man that had been brought in to replace him, David Wood, will now become managing director.
Mothercare's chairman Clive Whiley said action was needed after the company's recent financial performance created a "legacy of loss-making stores within the UK."
He said: "[This] has resulted in an unsustainable situation for the Mothercare brand, meaning the group was in clear need of an appropriate resolution.
"These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare's transformation.
"These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally."
Retailers across the board have been battered by weak consumer confidence off the back of soaring Brexit-fuelled inflation.
They have also had to contend with surging wage costs and eye-watering business rate hikes.
Since January, Toys R Us and Maplin have filed for administration while fashion retailers such as New Look and Select have embarked on radical store closure programmes.