Fears for Mothercare’s final 79 branches as firm calls in restructuring experts

Mothercare bosses have called in restructuring experts from accountancy giant KPMG, in a move that could place the future of its last 79 stores on the line.

The struggling retailer, which fell to a £36.3million loss last year under a controversial company voluntary arrangement (CVA), has been trying to sell its UK arm.

It comes after bosses axed dozens of stores as part of a deal to keep the company trading – taking the total number of branches in the UK to just 79.

Mothercare is now considering further closures, rent cuts and a sale of the remaining part of its business.

It told the Mirror it's "looking at options" including a franchising arrangement, to mirror its profitable international business.

This would effectively turn the retailer into a 'brand' and 'supplier'.

A spokesman told Mirror Money: "Our immediate priority is to complete the transformation of the business with a near-term focus on evolving and optimising the ownership, structure and model for our UK retail operations as an independent franchise."

The news comes just months after Mothercare sold off its Early Learning Centre arm to The Entertainer for £13.5million.

A statement in March said that while Mothercare has a presence in the toy market through the Early Learning Centre (ELC), it does not have the money to continue to invest in and make profits from the "specialist brand".

It said that Mothercare "lacks the scale" to deliver a product range to match current market competition – led largely by the firm's decision to withdraw items for older age groups in 2017.

The Early Learning Centre – which largely operates as concessions in Mothercare stores – continues to feature in branches and online.

It now runs in 79 Mothercare stores in the UK, 400 stores internationally via franchise partners, and online.

Mothercare’s UK business has been unprofitable for more than a decade, which sparked a mass of closures last year.

In January, it warned of a "challenging period" after even digital sales at the retailer dropped 16.3%.

It blamed lower iPad sales led by its store closure programme as well as a smaller 'Toy offer' with less discounting.

By the end of March 2019, the chain's business store count had fallen from 137 in May 2018 to 79.

The company also said it is aiming to be debt free by the end of this year.

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