Mothercare administration – Latest store closures and why is it closing down?

MATERNITY and babywear seller Mothercare is the latest retailer to fall victim to challenging high street conditions.

Here’s what we know about the chain’s changing fortunes – and which stores are set to close in the UK.

Mothercare has revealed it plans to appoint administrators in the next 48 hoursCredit: Getty – Contributor

Why is Mothercare going into administration?

Mothercare has announced it is calling in administrators after describing the UK arm of the business as “unsustainable”.

The retailer had been trying to sell its UK arm after losing £36.3million before tax last year, but failed to find a buyer.

The announcement puts 2,500 jobs at risk.

In the year to March 2019, the retailer recorded a loss before tax of £87.3million.

Accountancy firm KPMG was brought in to look at all the options available to the Mothercare Group.

But in a statement on November 4, 2019, the store said its remaining shops were “not capable of returning to a level of structural profitability and returns that are sustainable for the group”.

It added: “Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK.”

Which stores are closing and what happens next?

Mothercare had already gone through a company voluntary arrangement (CVA), which allowed it to shut 58 of its then 137 shops.

The retailer says its remaining 79 UK stores will continue to trade as normal for the time being, although it will be up to the administrators whether to close shops while it either searches for a buyer or winds the business down.

The company has its headquarters in Watford, Hertfordshire, but also operates in 40 overseas territories.

Mothercare’s international operations, including stores in the Middle East, made a profit of £28.3million in 2018, and will not be affected by the administration announcement.