All Mothercare UK stores to close as troubled retailer appoints administrators

Katy Clifton6 November 2019

All of Mothercare's UK stores are set to close after the retailer called in administrators, putting thousands of jobs at risk.

The company has confirmed the appointment of PricewaterhouseCoopers, raising fears over the future of its 79 stores and 2,500 employees.

It said that having taken insolvency and legal advice, the board has "decided that there was no reasonable alternative but to appoint administrators".

There will be a phased closure of all its 79 UK stores, PwC said.

A statement from Mothercare UK added: "The discussions we have held with the administrators anticipate that a program will be put in place for the closure of Mothercare UK’s 79 directly operated stores."

Clive Whiley, chairman of Mothercare, 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 added: "Despite the changes implemented over the last 18 months contributing to a significant reduction in net debt over the same period, Mothercare UK continues to consume cash on an unsustainable basis.

"The action announced today has been carefully thought through and without it, the existence of the wider group would be threatened."

It comes after it emerged the company was looking to move the pension schemes for its troubled UK business into its profitable parent group.

The company is understood to be finalising a deal to move the pension schemes of its UK employees from the troubled arm as part of a new funding plan to preserve benefits for its scheme members.

Mothercare is in talks with pension trustees over a potential agreement to move the schemes into the global parent group which has continued to trade profitably despite its UK woes.

A deal would stop the funds being placed into the UK Pension Protection Fund (PPF).

If the pension schemes enter the industry-funded support system, it could mean significant cuts to future retirement benefits.

The UK's Pensions Regulator is understood to have been kept informed about the latest developments, which were first reported by Sky News.

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