Mothercare on the brink of collapse as they announce plans to go into administration, putting 2,500 jobs at risk
5 November 2019, 08:05 | Updated: 5 November 2019, 08:32
The mother and baby shop has announced their plans to put the business into administration.
Mothercare has been a go-to brand for many mothers, fathers and expecting parents since they first opened 58 years ago.
Now, after almost six decades on the UK high-street, the brand have announced plans to go into administration.
According to Mothercare, their 79 UK stores were “not capable of returning to a level of structural profitability”, and they have since been unable to find a buyer.
If the brand do go into administration, as many as 2,500 jobs will be at risk across the UK.
For now, the brand will trade as usual in their stores.
In a statement, Mothercare said: "Since May 2018, we have undertaken a root and branch review of the group and Mothercare UK within it, including a number of discussions over the summer with potential partners regarding our UK Retail business.
"Through this process, it has become clear that the UK Retail operations of the group, which today includes 79 stores, are not capable of returning to a level of structural profitability and returns that are sustainable for the group as it currently stands and/or attractive enough for a third party partner to operate on an arm's length basis.
"Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK.
"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. Plans are well advanced and being finalised for execution imminently."
BBC business correspondent Emma Simpson has put the collapse of the company down to the extensive competition on the high street.
She said: “From Zara and H&M to the major supermarkets, there are no shortages of places to buy children's clothing and often at cheaper prices.
"And then there's online, with the likes of Amazon who are able to deliver basic kit to your doorstep within hours of ordering. It has all eaten into Mothercare's market share.”
Emma claims that Mothercare has been losing money for “a very long time”, and that the company have “run out of time and money” to “retrieve it’s fortunes”.
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