Mothercare's staff in Llandudno in the dark about store closure

Mothercare's staff in Llandudno in the dark about store closure

Mothercare's staff in Llandudno in the dark about store closure

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.

Shares in Mothercare were up 4.8 pence at 26.6 pence at 0832 GMT, valuing the business at 46 million pounds. The potential for the Mothercare brand in the United Kingdom, benefitting from a restructured store estate, and internationally remains significant.

The shake-up aimed at restoring the fortunes of the chain are likely to result in hundreds of job losses.

The first Mothercare in 1977
GETTYIraqi-born British entrepreneur Selim Zilkha founder of Mothercare UK 3rd November 1977

"These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare's transformation".

As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.

The baby chain, which will lay out details of the overhaul in its results on Thursday, ditched Mr Newton-Jones as chief executive last month, with then-chairman Alan Parker having said although he had "done a good job, we think we can do even better going forward".

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Mothercare chairman Clive Whiley said: "These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the United Kingdom and internationally".

The company plans cuts to its United Kingdom shop network under a company voluntary arrangement (CVA), a solution which must be approved by creditors and would also see rent reductions at 21 further outlets.

Mothercare now trades from 137 United Kingdom stores but aims to reduce that to 78 by 2020, meaning a further nine stores would close beyond this initial programme.

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Creditor meetings to vote on the CVA proposals are expected to be held on June 1, with the process expected to complete in July.

It comprises £28 million through an equity capital raising, an extension of its existing debt to £67.5 million, £18 million in shareholder and trade partner loans.

The closures could save the company £10 million a year, as well as rent reductions being implemented in a further 71 stores.

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