Mothercare’s UK arm has officially appointed administrators and will close all of its stores and offices with the loss of 2,800 jobs.
The retailer confirmed the appointment of Zelf Hussain, Toby Banfield and David Baxendale as joint administrators from PwC of Mothercare UK and its Mothercare Business Services Limited arm on Tuesday afternoon.
In a statement, Mothercare confirmed the administration would not include its profitable overseas operations, which have more than 1,000 stores in 40 countries. Mothercare’s overseas arm will continue to trade as normal.
Hussain said Mothercare’s 79 remaining UK stores would “be wound down over the coming weeks and months” and confirmed that 2,485 retail jobs and 384 head office and distribution staff would be affected.
He added: “This is a sad moment for a well-known high street name. No-one is immune from the challenging conditions faced by the UK retail sector. Like many other retailers, Mothercare has been hit hard by increasing cost pressures and changes in consumer spending.
“It’s with real regret that we have to implement a phased closure of all UK stores. Our focus will be to help employees and keep the stores trading for as long as possible.”
The retailer first warned it was planning on calling in administrators on Monday after it became clear the UK business could not return to profitability.
Mothercare UK underwent a company voluntary arrangement in May 2018, when it closed 55 high street stores in a bid to survive.
However, Mothercare said its UK arm still made an operational loss of £36.3m in the year ending March 2019.
After a “root and branch review” of the wider group, Mothercare decided it had become “clear that the UK retail operations of the group… are not capable of returning to a level of structural profitability”.
Mothercare chair Clive Whiley said: “It is with deep regret and sadness that we have been unable to avoid the administration of Mothercare UK and Mothercare Business Services, and 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.”
He also blamed challenging conditions in the UK retail sector, which he said was “facing a near existential problem”.
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