Mothercare has increased the number of stores it plans to close to 60, resulting in the loss of 900 jobs.
The struggling retailer said its subsidiary Childrens World has been placed into administration and it will transfer 13 of its 22 stores to Mothercare.
Last month, Mothercare rehired Mark Newton-Jones as its chief executive, announced plans to close 50 stores and raise fresh money from its shareholders as part of a rescue plan.
In an update to the London Stock Exchange, the company said it plans to raise £32.5m through the sale of new shares to existing shareholders. It hopes to complete the process by July 27, by which time it expects to be able to tap £67.5m from existing lenders.
Mark Newton-Jones, chief executive, said: “After a very challenging period for our business, we have now finalised arrangements to restructure and refinance the group, ensuring that the transformation of the Mothercare brand we started four years ago can now be completed.”
He added: “We have seen an unprecedented period for UK retail and we have not been alone in facing a number of strong headwinds.”
Like other struggling high street names, Mothercare entered into a Company Voluntary Arrangement, which enables it to close loss-making stores.
Since January, Toys R Us and Maplin have filed for administration, while fashion retailers such as New Look and House of Fraser have embarked on radical store closure programmes.
The company said current trading continues to follow the pattern seen in the second half of the last financial year, with challenging conditions in the UK and some stability overseas.
Last month, Mothercare reported a £72.8m pre-tax loss for the year to 24 March, compared to a £7.1m profit a year before – dragged into the red by costs such as restructuring, store closures and writedowns in the value of parts of the business.
Mothercare’s stock slumped 9% to 26p in early London trading.
From – SkyNews
