Mothercare calls in administrators

Company “not capable of returning to a level of structural profitability and returns that are sustainable”, with no buyer found during summer talks

Written by Rhys Thomas

Posted 04.11.2019 | Retail

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Mothercare is calling in administrators to its UK business, which operates 79 stores and employs around 2,500 members of staff.

The nursery product retailer confirmed today, Monday, that administrators will be appointed to its UK retail business and support arm, Mothercare Business Services.

It said the UK business was “not capable of returning to a level of structural profitability and returns that are sustainable for the group as it currently stands”, and the company “is unable to continue to satisfy the ongoing cash needs of Mothercare UK”.

Hopes that some or all of Mothercare’s UK stores would be snapped up by a third-party have also been quashed after a “number of discussions” through the summer failed to find a potential partner for the UK retail business.

In its current state, Mothercare said it was simply not “attractive enough for a third party partner to operate on an arm’s length basis”.

Mothercare’s profitable international business will not be affected by the move. More than 1000 stores operate overseas through a franchise model, a system Mothercare chief executive Mark Newton-Jones had ambitions to implement in the UK.
 
Plans were underway throughout the summer to “evolving and optimising the ownership, structure and model for our UK retail operations as an independent franchise”.

Mothercare lost £36.3m before tax last year, and saw like-for-like sales diminish nearly nine per cent.

Mothercare sold off its toy retailer business Early Learning Centre to The Entertainer in March this year. Gary Grant’s toy retail empire purchased the high street staple for £13.5m.

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