Mothercare, the baby and maternity retailer, is to appoint administrators to its UK high street chain, putting 2,500 jobs at risk. The retailer said it had become clear its 79-shop UK chain, which lost £36.3m last year, would not return to profitability and that it had failed to find a buyer for the business. The shops will stay open until administrators have been appointed and wound down the business.
The move does not include Mothercare’s profitable overseas operations, which have more than 1,000 stores in more than 40 countries. The company said the UK administration filing was a “necessary step in the restructuring and refinancing of the group”. The company had already cut its UK store total from 134 after a collapse in sales and earlier this year sold the Early Learning Centre toy brand in a desperate attempt to keep the UK business afloat.
Mothercare’s move is the latest blow to the UK high street. It follows the collapse of a number of well-known names in recent months, including Karen Millen and Bonmarché. Others, including House of Fraser, Debenhams and Arcadia Group, have used an insolvency procedure known as a company voluntary arrangement (CVA) to close shops and cut jobs. Mothercare has struggled in the UK in recent years, hit by competition from the supermarkets and online retailers. A CVA last year failed to prevent its collapse into administration.
Richard Lim, chief executive of the Retail Economics consultancy, said: “This is perhaps one of the most highly anticipated collapses on the high street. The retailer was already on life support, having conducted a CVA last year. The cost-cutting operation and disposal of assets have not gone far enough to revive plummeting profits. Years of underinvestment in the online business and its inability to differentiate itself as a specialist for young families and expectant parents has been the root of its seemingly inevitable downfall. As competition has become fiercer they have been beaten on price, convenience and the overall customer experience.”
Rebecca Long-Bailey, the shadow business secretary, said: “Mothercare disappearing from our high streets would be a huge loss to the new parents who rely on it and the thousands of workers whose jobs are at risk. The government must urgently meet with unions and the company to safeguard these jobs. Under the Conservatives, our high streets continue to suffer. They are at the heart of our communities and desperately need saving. Labour’s five point plan will rejuvenate Britain’s town centres and protect jobs.”