0800 644 6080
Call FREE from Landline and Mobile
Est. 1989

Mothercare to Appoint Administrators to UK Retail Chain

Written by: Keith Tully

Reviewed: Monday 4th November, 2019

Mothercare logoThe mother and baby products retailer Mothercare is poised to appoint administrators to handle its loss-making UK stores.

A total of around 2,500 people are employed by the chain of outlets across the country and they now face an uncertain future.

It was revealed in recent days that Mothercare’s bosses had called in advisers from KPMG to look at potential restructuring options but administration now appears to be unavoidable.

Entry into a Company Voluntary Arrangement (CVA) last year saw Mothercare close dozens of stores and shed hundreds of jobs.

There has been speculation that the company could enter another CVA but entry into administration has now been deemed a necessary step by the relevant parties involved.

A statement from Mothercare made clear that its Mothercare UK and Mothercare Business Services operations are both being entered into administration.

Overseas aspects of Mothercare’s operation, which incorporates more than 1,000 stores in over 40 countries, have generally been performing considerably better than its UK business and they should not be directly impacted by its administration.

The most recently recorded financial figures for Mothercare UK were for the year to the end of March 2019 and they showed losses worth over £36 million, compared to profits of £28 million posted by its international operations. 

Statements given by the company describe the UK business as no longer being “capable of returning to a level of structural profitability”.

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

Commenting on the situation and the latest developments, Richard Lim, chief executive of Retail Economics, said: “Years of underinvestment in the online business and its inability to differentiate itself as a specialist for young families and expectant parents has been the root of its seemingly inevitable downfall.”

“As competition has become fiercer they have been beaten on price, convenience and the overall customer experience,” Mr Lim added. 

Recent years have been exceptionally tough for retailers across the UK, with the British Retail Consortium having revealed last month that in the region of 85,000 jobs were lost throughout the retail sector in the year to the end of September 2019.

Keith Tully

Author
Keith Tully
Partner

Join Keith Tully on Linked In Join Keith Tully on Google Plus Follow Keith Tully on Twitter

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

Meet our Team of Experts
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
Processing...
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Desling with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
75
Number of UK Offices
30000
Directors Helped
70+
Licensed Insolvency Practitioners