Mothercare UK administration threatens 2,500 jobs

Baby goods retailer Mothercare has said it plans to call in administrators to the troubled firm’s UK business, putting 2,500 jobs at risk.

Mothercare said its 79 UK stores were “not capable of returning to a level of structural profitability and returns that are sustainable for the group”.

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

It said stores would continue to trade as normal for the time being.

Also affected is Mothercare Business Services Limited (MBS), which provides certain services to Mothercare UK

Mothercare has already gone through a company voluntary arrangement (CVA), which allowed it to shut 55 shops.

“These notices of intent to appoint administrators in respect of Mothercare UK and MBS are a necessary step in the restructuring and refinancing of the Group,” Mothercare said.

“Plans are well advanced and being finalised for execution imminently. A further announcement will be made in due course.”

Mothercare also operates in more than 40 overseas territories which are not subject to administration.

The company said that in the financial year to March 2019, its international business generated profits of £28.3m, whereas the UK retail operations lost £36.3m.

The move comes as High Street retailers continue to face tough times amid a squeeze on consumers’ income, the growth of online shopping and the rising costs of staff, rents and business rates.