PricewaterhouseCoopers LLP has been appointed as administrators to Mothercare’s active trading subsidiary Mothercare UK and to Mothercare Business Services Limited (MBS), which provides certain services to Mothercare UK.
Mothercare operates a successful global brand business generating over £500m of revenues each year. This is across over 1,000 stores internationally in over 40 territories in which the Mothercare brand operates.
In the financial year ending March 2019, the brand generated profits of £28.3m internationally. The UK retail operations, however, lost £36.3m.
Having taken insolvency and legal advice, the directors of Mothercare UK and MBS have now confirmed that there is no reasonable alternative but to appoint administrators.
Commenting is Clive Whiley, chairman of Mothercare.
“It is with deep regret and sadness that we have been unable to avoid the administration of Mothercare UK and Mothercare Business Services. We fully understand the significant impact on those UK colleagues and business partners who are affected.
“However, the Board concluded that the administration processes serve the wider interests of ensuring a sustainable future for the Company; including the wider Group’s global colleagues, its pension fund, lenders and other stakeholders.
“The UK high street is facing a near existential problem with intensifying and compounding pressures across numerous fronts. Most notably the high levels of rent and rates and the continuing shifts in consumer behaviour from high street to online.
“Mothercare UK is far from immune to these headwinds despite the strength of the Mothercare brand, its exclusive and quality product range and recognised customer service. Despite the changes implemented over the last 18 months contributing to a significant reduction in net debt over the same period, Mothercare UK continues to consume cash on an unsustainable basis.
“The action announced today has been carefully thought through and without it, the existence of the wider Group would be threatened. We know it is right for the wider Group to ensure that Mothercare remains the leading global brand for parents and young children with a bright and solvent future within the international franchise business.”
The Company and its other subsidiaries are not in administration. The Group, therefore, will be free to continue to trade in the normal course of business.
