Mothercare is being forced to close ten more stores putting 100 jobs at risk as it deals with ‘brutal’ High Street conditions.
The children-and-baby chain will shut 60 shops instead of 50, threatening 900 jobs up from 800 previously expected.
The chief executive admitted the group – which has more than 1,000 stores worldwide with 137 shops in the UK – desperately needed to transform after revealing part of the business had gone bust.
Store closures: Mothercare will now shut 60 shops instead of 50, threatening 900 jobs up from 800 previously expected
Mark Newton-Jones confessed the group’s UK business has suffered lack of investment over the past decade saying Mothercare ‘hadn’t even had a lick of paint and hadn’t modernised as a retailer’.
Newton-Jones added: ‘What we set out to do three and a half, four years ago is to invest and to modernise.
‘We will really be able to speed up the transformation, and by God we need to speed up the transformation, because the retail landscape is pretty brutal at the moment.’
The latest setback for the High Street comes as retailers battle with crippling business rates and soaring rents.
Around 50,000 shops have closed already this year as climbing costs and the onslaught from online shopping leaves retailers struggling to stay in business.
By June 2019 Mothercare will have 77 shops and 73 by the end of the 2021-22 financial year. The change to planned store closures comes after a bungled vote on its turnaround plan.
The additional 100 stores being axed are part of its Children’s World subsidiary, which operate under the Mothercare name.
It will transfer 13 of the stores to the Mothercare group while placing the rest of the division in administration.
Mothercare announced last month that creditors had backed an insolvency procedure called a company voluntary arrangement.
But a review of the votes by KPMG revealed the Children’s World subsidiary had won only 73.3 per cent of the votes, just short of the 75 per cent it needed, and which other parts of the CVA received.
As part of the restructuring Mothercare said it was tapping existing investors to raise £32.5million by selling new shares.
It plans to complete the fundraising by July 27, by which time it hopes a total of £67.5million will be raised.