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Mothercare brings in KPMG to asses new options; floats franchise idea for UK

Mothercare has brought in the restructuring experts KPMG to assess what options the retailer has for its UK business, including a potential second CVA and the sale of its business, reports have suggested.

Mothercare has been trying to sell its business in the UK, but has so far not managed to find suitors. The latest move could put 2,500 jobs at risk.

Most recently, the business carried out a CVA with KPMG to close 55 of its stores. It came as Mothercare recorded an overall loss before tax of £87.3 million for the year up to March 30. Its fourth quarter like for like sales fell by 8.8 per cent.

Then, in the 15 weeks to July 13 this year, Mothercare total group sales fell by 9.2 per cent.

Among the potential options now being floated for Mothercare is a suggestion from CEO Mark Newton-Jones to turn the UK operation into a franchise that emulates its international business model.

“Our priority is to complete the transformation of the business with a near-term focus on evolving and optimising the ownership, structure and model for our UK retail operations as an independent franchise,” said Mothercare.

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