Mothercare’s UK business will be wound down by February, resulting in 79 store closures and 2,500 redundancies, Drapers can reveal.
On 5 November, Mothercare appointed Zelf Hussain, Toby Banfield, and David Baxendale of PWC as administrators for Mothercare UK and Mothercare Business Services (MBS), which is responsible for Mothercare UK’s back-office functions, including finance, HR, property and IT.
Hussain told Drapers that PWC has been tasked with trading off the UK business over the next two to three months, before closing it down. At Mothercare’s head office around 10 staff – mostly in back-office functions – were made redundant yesterday. Around 125 employees were made redundant the day after the company fell into administration.
Mothercare’s UK arm had been up for sale before it fell into administration, but no one had stepped forward to purchase the UK store portfolio. Before administration, two parties made indicative offers and undertook additional diligence and attended meetings and calls with management. Neither progressed to the stage of a final offer being made, either to buy the business or, separately, the brand.
In its most recent results, total UK sales fell by 23.2% for the 15 weeks to 13 July 2019 as a result of the store closure programme, which cut the UK portfolio from 134 to 79. Online sales were also impacted by store closures – down 12.1% – as the retailer lost out on sales that were previously made via in-store devices. Total group sales fell by 9.2%.
PWC said Mothercare UK’s revenue was reported at £336.6m in March 2019, compared with £381.5m in March 2018. Losses amounted to £36.3m in March 2019, compared to £40.4m in March 2018.