Mothercare completes £30m fundraising as it shuts stores
The embattled retailer is shutting stores in the UK.
Mothercare has successfully completed a share issue, raising £32.5 million as it pushes ahead with sweeping store closures.
The embattled retailer, which has undergone a significant refinancing while shutting stores, said it was faced with a “bleak future” ahead of the restructuring and had more work to do.
The babywear chain has embarked on a plan to shut 60 of its outlets by June next year, putting 900 jobs at risk.
Conditions in the retail sector remain challenging and we know we must adapt with pace as we move forward Clive Whiley, interim executive chairman
Mothercare has identified savings of £19 million through the store closure process, and hopes to realise £10 million in cash.
Clive Whiley, interim executive chairman, said: “Earlier this year Mothercare faced a bleak future with growing financial stress upon the business and in May we announced a series of measures to refinance and restructure the business.
“Conditions in the retail sector remain challenging and we know we must adapt with pace as we move forward. We are clear about what needs to be done and have targeted significant efficiencies and cost savings, as well as areas of investment, both of which will underpin our return to a sustainable future.”
Earlier in the year, Mothercare revealed a brutal set of annual results, swinging to a £72.8 million pre-tax loss in the year to March 24, which compares with a £7.1 million profit in 2017.
On an adjusted basis, pre-tax profits plummeted 88.3% to just £2.3 million.
Mothercare is one of a number of retailers facing financial difficulties, and is shutting up shops through a controversial procedure known as a Company Voluntary Arrangement (CVA), which has been used by a string of retail businesses.
Since January, Toys R Us, Maplin, and Poundworld have filed for administration, while retailers such as House of Fraser, New Look, Carpetright and others have embarked on radical store closure programmes.