Mothercare has gone into administration - with all 79 stores to close

UK high street chain Mothercare has entered administration, putting 2,500 jobs at risk.

Wednesday, 6th November 2019, 1:13 pm

The retailer lost £36.3m last year and, after a review, it had become clear that the business would not return to profitability.

There will now be a phased closure of all of its 79 UK stores, administrators from PricewaterhouseCoopers (PwC) said.

Zelf Hussain, administrator at PwC, said: "It's with real regret that we have to implement a phased closure of all UK stores. Our focus will be to help employees and keep the stores trading for as long as possible."

UK high street chain Mothercare has entered administration, putting 2,500 jobs at risk.

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Reduced sales

A collapse in sales saw the company cut its UK store numbers from 134 down to 79.

Earlier this year, the company sold the Early Learning Centre toy brand to The Entertainer for £13.5 million, in an attempt to keep the UK business going.

Last year, the business, which has been unprofitable for over 10 years, dropped to a £36.3 million loss under a company voluntary arrangement (CVA). Online sales also dropped by 16.3 per cent earlier in the year.

Earlier this year, the company sold the Early Learning Centre toy brand to The Entertainer for £13.5 million,

‘Not capable of returning to a level of structural profitability’

A company statement said, "Since May 2018, we have undertaken a root and branch review of the group and Mothercare UK within it, including a number of discussions over the summer with potential partners regarding our UK retail business.

"Through this process, it has become clear that the UK retail operations of the group, which today includes 79 stores, are not capable of returning to a level of structural profitability and returns that are sustainable for the group as it currently stands and/or attractive enough for a third party partner to operate on an arm’s length basis.

“Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK.

"These notices of intent to appoint administrators are a necessary step in the restructuring and refinancing of the group. Plans are well advanced and being finalised for execution imminently. A further announcement will be made in due course."