Mothercare Brings in Advisors to Look at Restructuring Options

The mother and baby products retailer Mothercare has brought in advisors from KPMG to look at potential restructuring options as it struggles to stay in business.

Mothercare has been posting significant losses for some time and bosses have been seeking to sell the operation, which incorporates 79 stores and employs roughly 2,500 people in the UK and elsewhere.

In March 2018, the company sold its Early Learning Centre business for £13.5 million but it soon found itself in serious financial strife later the same year.

After entering into a Company Voluntary Arrangement (CVA) in 2018, a total of 55 Mothercare stores were closed with around 800 jobs lost as a result.

More than £30 million was subsequently raised in order to keep the business operational but it’s become clear that the future remains uncertain for what has long been the country’s foremost mother and baby products retailer.

Recent years have been extremely testing for many different retailers, with CVAs becoming increasingly commonplace in the sector and some of the country’s best-known and longest-standing high street operators finding themselves in administration.

Mothercare posted losses of £87.3 million for the 53 weeks to the end of March 2019 but its international operations managed to deliver profits worth £28.3 million last year.

It’s believed that bosses at the company are looking to find ways of bringing performance at its UK stores closer to that of its overseas branches if new buyers for the entire business cannot be found.

“Our 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,” a recent statement from the company explained.

According to reports from the Times newspaper, it could be that Mothercare will soon enter a CVA for the second time in recent years to reduce its liabilities.

However, it is understood that a sale of the business overall remains the preferred solution for those leading and advising the company.