Mothercare officially goes into administration with plans to close 79 stores and puts thousands of jobs at risk
MOTHERCARE has officially collapsed into administration this evening after 58 years on the high street.
It plans to close its 79 UK shops, putting 2,500 jobs at risk.
The baby and children's wear specialist, which has been on the UK high street since 1961, has been struggling for months due to poor sales.
But following weeks of speculation it's now collapsed into administration appointing PricewaterhouseCoopers (PWC) to deal with the process.
Mothercare puts the blame on challenging high street conditions including high rents and shoppers increasingly turning online.
PWC confirms that all of the retailer's stores will shut, although it couldn't give timescales on when this will happen or whether there will be closing down sales, only saying it will be a "phased" closure.
The administrator was also unable to confirm what will happen to Mothercare's 2,000 part-time and 500 full-time workers, or whether the UK website will continue trading.
Again, it added that it was too soon to say what the administration means for shoppers' rights.
Often when retailers go into administration terms and conditions for refunds and gift cards are changed to the detriment of shoppers.
The Sun warned Mothercare customers earlier this week to redeem unused vouchers and return unwanted items as the retailer balanced precariously on the brink of collapse.
But the Mothercare Group, which has more than 1,000 stores internationally in over 40 countries, is unaffected and will continue trading as normal.
Trouble on the high street in 2019
MOTHERCARE isn't the only retailer to have struggled in 2019.
So far this year we've also seen:
- Debenhams axe 22 of its 50 branches
- Forever21 close 350 stores with its UK branches also at risk
- Jamie Oliver's "Jamie's Italian" chain go bust, alongside his Fifteen and Barbecoa restaurants
- Links of London go into administration putting 350 jobs at risk
- Marks and Spencer close 35 more stores as it pushes forward with plans to axe 145 shops across the UK
- Dozens of Monsoon and Accessorize stores close
- While struggling shoe shop Office has said it "could close shops" as part of restructuring plans
- Fears Pizza Express could be next to go into administration as it "brings in emergency advisers"
- Hairdressing chain Supercuts went into administration in October putting 1,200 jobs and 220 salons at risk
Internationally, the retailer is much more successful and turned a profit of £28.3million in the year to March 2019.
In the same period, the UK arm recorded a loss before tax of £87.3million.
Last year, Mothercare carried out what's known as a "Company Voluntary Arrangement (CVA)" that saw it close 58 of its then 137 shops in the UK.
These closures were completed by March this year, and the business has been shutting other outlets over the past 12 months too.
Just a few months ago in March 2019, Mothercare also sold its Early Learning Centre business to The Entertainer for £13.5million.
Clive Whiley, chairman of Mothercare said today: “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.
“The UK high street is facing a near existential problem with intensifying and compounding pressures across numerous fronts, most notably the high levels of rent and rates and the continuing shifts in consumer behaviour from high street to online.
"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."
If you are made redundant, you can apply to the government via for a redundancy payment, holiday pay, and unpaid wages and overtime.
Worried staff can also contact the Money Advice Service for free on 0800 138 7777.
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Mothercare isn't the only retailer struggling. Back in April, Debenhams fell into administration with 50 stores to close after Mike Ashley’s rescue plan failed.
And in July, struggling shoe shop Office said it "could close branches as part of restructuring plans".
Meanwhile, last month, the owner of hairdressing chain Supercuts went into administration putting 1,200 jobs at risk.