Telford Mothercare branch set to remain open
Mothercare’s only Shropshire store looks set to remain open – despite the firm revealing plans to close 50 underperforming branches.
The closures, which are expected to result in around 800 job losses, will be carried out through a company voluntary arrangement (CVA) – a move which allows companies to close loss-making shops and secure rental discounts.
Mothercare employs about 3,000 people across 137 outlets in the UK, including a branch in Telford Bridge Retail Park. It also has stores in Walsall, Stafford and at Merry Hill shopping centre. It will have just 78 by 2020, down to 72 two years after that.
The company is not yet saying which stores will close, but it is believed the Telford store will avoid the axe. In a statement Mothercare 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.” Meanwhile, 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.
As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.
It comprises £28m through an equity capital raising, an extension of its existing debt to £67.5m, £18m in shareholder and trade partner loans. Chairman Clive Whiley said: “The recent financial performance of the business, has resulted in an unsustainable situation for the Mothercare brand.”