PwC to wind down Mothercare stores in administration

PwC has been confirmed as handling the administration of babycare retailer Mothercare and has announced a phased closure of all the UK stores, putting over 2.500 jobs at risk

Zelf Hussain, David Baxendale and Mark Banfield, partners at PwC have been appointed as joint administrators of Mothercare UK Ltd, and Mothercare Business Services Ltd.

Mothercare plc (and subsidiaries) is a global retailer for parents and young children and operates an international franchise business alongside Mothercare UK. 

The business operates 79 retail stores in the UK and 1,010 overseas franchise stores across 40 territories. The entities in administration employ 2,485 retail staff and 384 head office and distribution staff.

The joint administrators said they will continue to trade the UK business, but the UK store portfolio will be wound down over the coming weeks and months.

Zelf Hussain, joint administrator and PwC partner, said: ‘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.’

While the international franchise operations are profitable, the UK segment has been loss making for a number of years.

The directors have recently explored many options to restructure Mothercare UK Ltd, including a company voluntary arrangement (CVA) in May 2018. Despite the restructuring that followed the CVA, trading has remained challenging, with difficult market conditions, reduced consumer spending and a fundamental change in high street retail.

Mothercare UK Ltd has been marketed for sale but, despite numerous expressions of interest in the brand, no offers were received that would preserve the business as a going concern.

In the meantime, the international franchise partners will continue to trade the Mothercare overseas business as normal.

Pat Sweet

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