Mothercare will invest heavily in digital to turn its fortunes around following its company voluntary arrangement (CVA), chief executive Mark Newton-Jones, told Drapers today.
Mothercare placed its subsidiary, Childrens World, into administration on 9 July after its CVA proposal failed to gain support from creditors.
On 1 June more than the required 75% of Mothercare UK creditors approved the retailer’s CVA proposals, under which it will close up to 50 stores and receive rent reductions on a further 21.
However, only 73.3% of creditors approved a proposed CVA for Childrens World, which accounts for an additional 22 stores.
Mothercare said it will transfer 13 of the 22 stores to other Mothercare group companies to continue trading.
The remaining nine stores – which Mothercare declined to identify – will close, leading to a further 100 redundancies.
Newton-Jones told Drapers improving the retailer’s digital capabilities was a priority: “Following the restructuring, we can go faster and we will be able to invest. Most of the stores we are keeping have already been refurbished so we don’t need to spend there but we do need to invest in digital and mobile.
“Our core customer is 25 to 35 years old and a digital native. Around 85% of our online turnover happens on a mobile, and of that only 10% is on a tablet. Our shopper uses a smartphone, so we need to speed the site up and improve our content and videos. It is important to differentiate ourselves – we are a specialist not a generalist.
He added that pricing in the UK would also be lowered to combat the tough trading environment: “The UK market is brutal. We won’t dumb down our product, but we will pass on value to our customers through multi-buys and lower prices in the UK over the next year.”
The window for the CVAs of Mothercare UK and ELC, which trades as Early Learning Centre, closed last week. Mothercare said no challenges had been lodged with it or filed with the High Court.
Mothercare also said it aimed to raise £32.5m from its existing shareholders through a fully underwritten equity issue.