Published: Thu, May 17, 2018
Money | By Armando Alvarado

Fears for future of Prescot's Mothercare store

Fears for future of Prescot's Mothercare store

Mothercare is also seeking...

The firm will also announce the closure of 50 of its 137 remaining stores when it releases its annual results later, according to a Sky News report.

Creditors will need to approve the company voluntary arrangement (CVA) in order to close stores and cut rents, another measure which has been agreed with landlords. One of these, the Pension Protection Fund, has already said it will vote in favour.

This is not the first time Mothercare has struggled, with the retailer closing nearly half of its stores across the United Kingdom in the last five years.

A revised £67.5mln debt facility will be available immediately, although its lender will pull the plug if the CVA isn't given the green light.

The company further said that the shareholder loans and the trade partner loan will provide immediate access to up to 18 million pounds (24.3 million dollars) of additional liquidity which Mothercare expects to fully meet the company's short term liquidity requirements, represent a strong signal of commitment and support from the company's largest shareholders and trade partners, alongside the company's existing lenders, to support Mothercare through this process.

US's Mnuchin to lead trade talks with China
The two are seen here in March at a White House ceremony with Commerce Secretary Wilbur Ross, second from left, and U.S. The U.S. -China trade talks in DC this week are a continuation of those Beijing-based trade meetings.

Mothercare also confirmed that Mark Newton-Jones, the chief executive it sacked last month, was to return. The decision to show him the door had been made under the watch of chairman Alan Parker, who has since stepped down.

Newton-Jones' replacement as CEO David Wood, a former Tesco (TSCO.L) executive, will become group managing director.

In a statement, Mothercare said: "Recent financial performance, impacted in particular by a large number of legacy loss making stores within the United Kingdom estate, has resulted in a perilous financial condition for the group".

Earlier this week it said it was "finalising a comprehensive restructuring and refinancing package to put the business on a stable and sustainable financial footing".

He continues: "The potential for the Mothercare brand in the United Kingdom, benefitting from a restructured store estate, and internationally remains significant".

Like this: