Future of another 300 Mothercare workers up in the air
The retailer is now considering ‘all options’ for 21 stores.
The fate of a further 300 Mothercare staff has been thrown into doubt after it emerged that a key plank of the retailer’s restructuring plan was rejected by creditors.
Mothercare said on Monday that rent reduction proposals for Childrens World, a subsidiary that houses 21 of its stores, had been knocked back by landlords following a vote last week.
The retailer is now considering “all options” for the unit, including shutting the outlets, which employ a total of 336 people.
It comes just days after Mothercare got the green light to swing the axe on 50 underperforming stores, including Early Learning Centre fascias, in a move that will see 800 jobs put at risk.
Those store closures will be carried out through a company voluntary arrangement (CVA) – a move which allows companies to close loss-making shops and secure rental discounts.
On Friday, Mothercare said it had received the backing of creditors, including its landlords, to press ahead with the CVA.
However, it did not at the time indicate that plans for Childrens World had received the backing of 73.3% of creditors, missing the 75% threshold required for it to pass.
Shares were down over 3% following the update.
The store closure programme is part of a wide-ranging restructuring plan that will also see Mothercare bag a refinancing package worth up to £113.5 million.
Mothercare chairman Clive Whiley said: “KPMG have confirmed the votes relating to Mothercare UK and Early Learning Centre CVA’s passed by a clear majority, however it is now clear that the CVA of Childrens World was not carried by creditors by a narrow margin.
“This will neither unsettle the UK restructuring and refinancing nor jeopardise our future transformation plans, which are already under way.
“As a board we are now considering our next steps with respect to Childrens World.”