Mothercare secures Â£30m funding as it shuts stores
Mothercare has successfully completed a share issue, raising Â£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.
Mothercare has identified savings of £19 million through the store closure process, and hopes to realise £10m 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 this year, the firm posted a brutal set of annual results, swinging to a £72.8m pre-tax loss in the year to March 24, compared to a £7.1m profit in 2017.
On an adjusted basis, pre-tax profits plummeted 88.3% to just £2.3m.
Mothercare is one of many 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 several retailers.
Since January, Toys R Us, Maplin, and Poundworld have filed for administration, while House of Fraser, New Look, Carpetright and others have embarked on radical closure programmes.