Mothercare calls in administrators putting 2,500 jobs at risk

Mothercare has 79 stores around the UK

In recent times, Mothercare has transformed itself into an worldwide franchising group and trades from 1,000 stores in about 50 countries.

Mothercare UK's spiralling sales have been a common feature in the group's trading statements over the last few years, but senior management continued to plan for a more multichannel future in the hope the business could modernise for the digital age.

Although Mothercare's stores and website are now trading as usual, administrators will decide whether or not to close down shops while they look for a buyer or cease trading altogether.

Earlier this year, Mothercare UK also offloaded its Early Learning Centre business to rival toy business The Entertainer for £13.5 million.

Baby goods retailer Mothercare has said it plans to call in administrators to the troubled firm's United Kingdom business, putting 2,500 jobs at risk.

Its profitable franchising business outside of the United Kingdom - which represents the vast majority of Mothercare's interests - is not covered by the process.

The retailer, which has around 500 full-time staff and 2,000 part-time employees, is set to follow the likes of Bonmarche, Jack Wills and Karen Millen, which have faced problems in recent months.

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In the United Kingdom the company lost over £36m a year ago.

This is the latest blow for Mothercare, whose creditors approved a CVA that saw the retialer shut down 55 stores in June previous year.

Shares in the group were down 28% at 0859 GMT on Monday after it said it was clear the United Kingdom retail operations, which trade from 79 stores, were not capable of returning to a level of profitability that was sustainable for the group as it now stands.

The company runs a global business generating over £500m of revenues each year from over 1,000 stores internationally in over 40 territories. According to Sky News, administrators have been put on standby while the company reportedly finalises a restructuring plan.

Mothercare insists the administration process is "a necessary step in the restructuring and refinancing of the group", while the hard-pressed stores will continue to trade as normal for the time being as will Mothercare shares.

"Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK", it said.

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