Mothercare calls in administrators putting 2,500 jobs at risk

The baby goods and maternity-wear retailer, which was founded in 1961, said it plans to line-up administrators after failing to turn around poor performance.
The baby goods and maternity-wear retailer, which was founded in 1961, said it plans to line-up administrators after failing to turn around poor performance.

Mothercare has revealed it is planning to call in administrators, which will put 2,500 jobs at risk.

The baby goods and maternity-wear retailer, which was founded in 1961, said it plans to line-up administrators after failing to turn around poor performance.

It said its 79 stores across the UK were "not capable of returning to a level of structural profitablity and returns that are sustainable for the group."

Mothercare's stores and website are trading as usual at the moment, but once appointed, administrators will decide whether or not to shut shops, resulting in job losses, while they either search for a buyer or wind the company down.

Shoppers with gift cards should consider spending them while they still can, while those planning to return items should also do so sooner rather than later.

Also affected is Mothercare Business Services Limited (MBS), which provides certain services to Mothercare UK.

Mothercare has already gone through a company voluntary arrangement (CVA), which allowed it to shut 55 shops.

In a statement Mothercare said: "Since May 2018, we have undertaken a root and branch review of the Group and Mothercare UK within it, including a number of discussions over the summer with potential partners regarding our UK Retail business.

"Through this process, it has become clear that the UK Retail operations of the Group, which today includes 79 stores, are not capable of returning to a level of structural profitability and returns that are sustainable for the Group as it currently stands and/or attractive enough for a third party partner to operate on an arm’s length basis.

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

"These notices of intent to appoint administrators in respect of Mothercare UK and MBS are a necessary step in the restructuring and refinancing of the Group."

Just a few months ago, Mothercare sold its Early Learning Centre business to The Entertainer for £13.5million.