Mothercare closing 50 stores and rehiring sacked CEO in shock rescue plan

Lester Mason
May 17, 2018

It is expected tomorrow to announce the closure of 50 stores, as part of a company voluntary arrangement (CVA), an insolvency process which allows companies to drive down rents at certain stores and shut underperforming sites.

Mothercare employs about 3,000 people across 137 outlets, and has a store in Friars Walk, Newport.

Mr Brake said there were 53 agreements, including those formerly known as compromise agreements, with employees between 2013 and 2017 - with confidentiality clauses included in "all or nearly all" of them.

It is thought that David Wood, the former Tesco executive who had replaced Mr Newton-Woods, will shift to another position with the group, although it was not clear what this role would be this evening.

As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.

In addition to the proposed equity issue the firm has also secured revised committed debt facilities of £67.5 million, £8 million of new shareholder loans and a new debtor backed facility of up to £10 million from a trade partner.

"These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the United Kingdom and internationally".

Since January, Toys R Us and Maplin have filed for administration while fashion retailers including New Look have embarked on store closure programmes.

Other reports by Iphone Fresh

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