Mothercare Ireland in examinership during rent renegotiation
Mothercare Ireland has been placed in examinership as bosses renegotiate high rents.
The parent and baby retailer has traded for 23 years and now has 18 stores and 275 employees across Ireland.
Owner David Ward said the protective step was a responsible decision and the best to safeguard the company's future.
"Whilst there may be a perception out there that the economy is recovering, retailing remains an extremely tough sector in every way," he said.
"We have made significant losses over the last four years and have done everything we can to reduce our cost base and increase sales. The unreasonable level of rents remains the largest threat to our business and we have to do something about it."
Mothercare Ireland said it will continue to trade as normal during the examinership process, with staff and suppliers being paid and gift cards honoured.
The repudiation and renegotiation of leases will be an essential part of the process, it said.
It said the move was essential for ensuring a long-term future and stressed that it was aimed at saving jobs and minimising store closures in a tough trading environment.
Many of its 18 stores have to contend with rents that significantly exceed the current market rents, Mothercare Ireland said.
Declan McDonald was appointed as interim examiner during a High Court application in Dublin.
Mothercare said it was committed to doing everything it could to minimise store closures and to keep job losses to an absolute minimum but it cannot afford to support unprofitable stores.
"Many companies have successfully come through the examinership process in recent years and we are confident that we too will emerge as a more robust company which is better equipped to deal with the changing retail environment," Mr Ward said.
"Mothercare has taken care of generations of babies and I have no doubt will continue to do so for many more when this process ends."
Retail Excellence Ireland (REI) said the latest examinership, along with that of Best Menswear on Tuesday, highlights the issue of high rents.
"It is a fact that many landlords are seeking to impose Celtic Tiger rents on struggling retailers. The domestic economy remains in a fragile state and these rents are simply untenable," REI chief executive David Fitzsimons said.
"Between 2000 and 2007 commercial rents increased by 240% while over the same period consumer prices increased by 30%. We implore landlords to charge rents which reflect market conditions. If landlords do not take a common sense approach more retailers will fail."