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Mothercare downsizes HQ as part of ongoing restructuring

By Huw Hughes

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Business

Mothercare has announced it is downsizing its headquarters and is seeking new funding amid its ongoing restructuring.

The maternity and babywear specialist also said it has a shortlist for potential replacements for interim CEO Glyn Hughes, who has ruled himself out of the permanent position. He will exit on 30 June.

The UK retail business of Mothercare UK entered into administration last November.

The company announced Monday it “remains on track to become a profitable international franchise operation, generating revenues through an asset-light model, operating in around 40 international territories.”

It is in talks with a number of potential new debt providers.

It also said it will be moving to a “smaller and more cost-effective” head office in early August in a move expected to save the company around 900,000 pounds per year and has agreed on a short-term sub-lease of a “substantial part” of its main Daventry warehouse to a third-party.

Mothercare said “constructive” talks are ongoing with existing franchise partners to establish “a more sustainable and less capital-intensive business going forward with effect from the A/W20 season.”

Around two-thirds of its partners’ global retail locations are now open following local guidance in their respective territories.

“[We] remain on track with the plans we set out at the end of March. We are finalising our arrangements with both our existing franchise partners and Boots as our new UK franchise partner and will make further announcements in due course. Our discussions with various other financing partners also continue constructively,” said Mothercare chairman Clive Whiley in a statement.

“We have carefully managed our business over the past three months, to mitigate the impact of the Covid-19 pandemic on our cash flows and liquidity during this period of global crisis which is reflected in our unchanged bank debt position since March. Whilst we have not been immune to temporary store closures in almost all of our territories over the period, I am pleased that we are seeing the reopening of our partners’ stores.

“At the same time, we continue to take action to reduce our cost base and address legacy issues, helping with our return to being a profitable and sustainable business.”

Photo credit: Mothercare, Facebook

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