Mothercare stores to close as restructuring plan voted through
Mothercare has been given the green light to swing the axe on 50 underperforming stores in a move that will see 800 jobs put at risk.
The store closures will be carried out through a company voluntary arrangement (CVA) - a move which allows companies to close loss-making shops and secure rental discounts.
On Friday Mothercare said it had received the backing of creditors, including its landlords, to press ahead with the CVA.
Mothercare currently employs about 3,000 people across 137 outlets.
The store closure programme is part of a wide-ranging restructuring plan that will also see Mothercare bag a refinancing package worth up to £113.5 million.
It comprises £28 million through an equity capital raising, an extension of its existing debt to £67.5 million, and £18 million in shareholder and trade partner loans.
Mothercare shares bounced 7% on the news.
Clive Whiley, Mothercare's interim executive chairman, said: "We are very grateful for the support of our many stakeholders across our creditor base in supporting today's CVA proposals.
"Their forbearance and support today is a crucial step forward to achieve the renewed and stable financial structure for the business that will drive an acceleration of Mothercare's transformation.
"These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally."
The store closures come at a dismal time for the high street.
Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look, Carpetright and others have embarked on radical store closure programmes.
Last month Mothercare unveiled a brutal set of annual results, swinging to a £72.8 million pre-tax loss in the year to March 24, which compares with a £7.1 million profit in 2017.
On an adjusted basis, pre-tax profits plummeted 88.3% to just £2.3 million.
Alongside the results, Mothercare announced that Mark Newton-Jones, who was given the elbow as chief executive in April, would return to the fold and once again take the top job.