Mothercare has detailed its intentions to appoint administrators for its UK high street business of 79 stores, after the troubled retailer lost £36.3 million last year.
Conceding that its UK operation would not return to profitability, the move will now put some 2,500 jobs at risk.
Administration of its UK business will not include Mothercare’s profitable overseas operations, which has more than 1,000 stores in more than 40 countries. Mothercare has said that the UK administration filing was a “necessary step in the restructuring and refinancing of the group.”
The company has already chopped its UK store numbers from 134 to 79 after a severe drop in sales, and earlier this year sold the Early Learning Centre toy brand to keep the UK business afloat.
Richard Lim, chief executive of consultancy Retail Economics, told The Guardian: “This is perhaps one of the most highly anticipated collapses on the high street. The retailer was already on life support, having conducted a CVA [company voluntary arrangement] last year. The cost-cutting operation and disposal of assets have not gone far enough to revive plummeting profits.
“Years of underinvestment in the online business and its inability to differentiate itself as a specialist for young families and expectant parents has been the root of its seemingly inevitable downfall. As competition has become fiercer they have been beaten on price, convenience and the overall customer experience.”