Mothercare this week set out its plans to complete its shift from UK multichannel retailer to international brand.
The company, listed in 2019 as a Leading retailer in IRUK Top500 research, has now closed all its 79 UK shops after putting Mothercare UK into administration on the grounds that its stores were no longer viable, while its UK website appears to be offline.
At the time it announced the administration, back in November, Mothercare said that the UK retailer operations were “not capable of returning to a level of structural profitability and returns the are sustainable for the group as it currently stands and/or attractive enough for a third party partner to operate on an arm’s length basis.”
Instead it will operate as an international franchise business, trading in more than 40 markets including the UK. Mothercare is currently finalising contracts with Boots as its exclusive franchisee in the UK over the the next five years.
To that end it is refinancing the business, raising £8.7m from existing investors. It has reduced its bank debt as a result of the Mothercare UK administration.
This week it announced changes to its board as it shifts from being a direct-selling retailer to a brand, selling via third-party franchisees. Mark Newton-Jones has stepped down as chief executive, but will remain an executive director until July as the transformation plan is completed. After that he will be available to be a non-executive director.
He is replaced in the short-term by Glyn Hughes, who steps up from the role of chief financial officer to become interim chief executive. Andrew Cook, previously corporate development officer, will become chief financial officer.
Clive Whiley, Mothercare chairman, said: "As we approach the completion of our transformation plan, Mothercare – one of the leading global brands for parents and young children – once more has a brighter future ahead as a solvent and cash generative group. We have made good progress with the transformation plan and the risks to achieving the outcomes we laid out in November are increasingly dissipated.
“Our plans for the final steps of the recapitalisation of the group are in hand and whilst the cash realisation from the Mothercare UK administration was lower than anticipated, the progress that we have made elsewhere means that the financing requirement overall is unchanged from our original plans.
“The board changes announced today align the management of Mothercare with that of a its new structure as an international franchise brand and will contribute to a further overhead reduction. In time we plan to add relevant skills and expertise – particularly in brand and product management – to the team to accelerate our development as an international brand owner and operator.”
Image courtesy of Mothercare