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Mothercare boss to return in shock U-turn as retailer plans store closures

Mothercare boss to return in shock U-turn as retailer plans store closures

Mothercare UK also announced that it will reinstate its former CEO Mark Newton-Jones (fired last month, according to the Guardian) as part of those survival measures. Reports suggested Mr Whiley had been a key player in pulling together a rescue deal and forming the restructuring plans.

David Wood, the man brought in to replace him, becomes managing director.

Uncertainty hangs over the future of Northern Ireland's five Mothercare stores after the retailer said it was to close 50 shops across the UK.

Chairman Clive Whiley said: "The recent financial performance of the business, impacted in particular by a large number of legacy loss-making stores within the United Kingdom estate, has resulted in an unsustainable situation for the Mothercare brand, meaning the group was in clear need of an appropriate resolution".

The struggling retailer has also agreed a rent cut with landlords for 21 of its stores.

Mothercare said in a statement: "Recent financial performance, impacted in particular by a large number of legacy loss making stores within the United Kingdom estate, has resulted in a perilous financial condition for the Group".

"Retailers considering a CVA should also be aware that it is not always possible to save the business from entering into administration and total closure, as happened in the case of Toys R Us".

Previous year it recorded a small operating profit after savings made from the closures of its Blackrock and Jervis Street stores in Dublin and the Cruises Street shop in Limerick.

No specific details have been revealed as to stores facing closure.

The refinancing comprises a proposed equity capital raise of £28m, which would be launched in July 2018 by way of a firm placing, placing and open offer, new shareholder loans of £8m from Mothercare's largest shareholders and a £10m debtor backed facility of £10m from trade partners.

The retailer has already almost halved its store numbers over the past five years.

A number of reasons have been cited for failures on the High Street, including a squeeze on consumers' income, the growth of online shopping and the rising costs of staff, rents and business rates.

Richard Lim, chief executive, Retail Economics said: "This is turning out to be a year of distress for the retail sector".

"Nothing can sum it up quite as well as the fact you can't get a pram round the store".

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