Reading jobs may be at risk as Mothercare closes 50 stores

Mothercare stores closing

The company confirmed it would reappoint the chief executive who left in April after poor Christmas trading and a profits warning.

Uncertainty hangs over the future of Northern Ireland's five Mothercare stores after the retailer said it was to close 50 shops across the UK.

Britain's Mothercare, the struggling mother and baby products retailer, said on Thursday it would close 50 more stores as part of a survival plan that would also see it ask shareholders for 28 million pounds ($38 million) in an equity raise.

David Wood, the man brought in to replace him, becomes managing director.

The company further added that the United Kingdom restructuring plan will involve an accelerated reduction of the United Kingdom store estate to reduce losses and rent liabilities and will be effected through the CVA Proposals.

Putting media speculations to rest, Mothercare has confirmed measures to refinance its business and restructuring of its United Kingdom store portfolio.

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Over the previous year Mothercare's shares have sunk by 83 percent.

"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".

The shake-up aimed at restoring the fortunes of the chain are likely to result in hundreds of job losses. The closures will leave it with 78 stores by 2020.

That won't be the only measure Mothercare wants to introduce; it also wants landlords of 21 other sites to agree to "material" rent reductions in a bid to dramatically cut its cost base.

As part of its restructuring, Mothercare has also arranged a refinancing package worth up to £113.5m, which includes £28m raised through issuing new shares, and an extension of its existing debt arrangements.

Mothercare said that the process to implement the CVA Proposals is expected to complete in July 2018 with the CVA creditor meetings expected to be held on June 1, 2018.

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