Friday, May 18, 2018

News: Rotherham Mothercare on "closure list"

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National retailer Mothercare has confirmed plans to close around 50 shops within a year and it's not looking good for the Rotherham store at Parkgate.

The closures are part of a restructuring plan as the struggling firm looks to secure its future by implementing a company voluntary arrangement (CVA) to close underperforming stores and reduce rents across the remaining portfolio.

The mother and baby products retailer also announced a refinancing package worth up to £113.5m. It comes as the Hertfordshire-based firm reports its financial results for the year to March 24 2018 where turnover was slightly down to £654.5m from the £657.4m in the previous year.

However, a profit of £7.1m in 2017 plunged to statutory pre-tax losses of £72.8m for 2018, due to restructuring, store closures and writedowns.

What appears to be a leaked internal memo showing which stores are included in the restructuring plan has been circulating online.

It shows that the Rotherham Mothercare store is one of 49 earmarked as "Category 3" stores - those that would close over the next 12 months.

Other local stores in Doncaster and at Crystal Peaks in Sheffield are both in the closure category on the list, which also shows that the retailer is looking to secure a rent reduction from the landlord at its Meadowhall store.

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Clive Whiley, interim executive chairman at Mothercare, said: "‎The recent financial performance of the business, impacted in particular by a large number of legacy loss making stores within the UK estate, has resulted in an unsustainable situation for the Mothercare brand, meaning the Group was in clear need of an appropriate resolution. Since my appointment as interim executive chairman, my priority has been to galvanise support from all of our stakeholders and provide a solution to the short-term problems facing the company.

"These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare's transformation. The potential for the Mothercare brand in the UK, benefitting from a restructured store estate, and internationally remains significant. However, there remains much to do and we must maintain a disciplined focus on cost control and cash generation throughout the business, but these measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally."

In 2013, the Early Learning Centre and Mothercare outlet store opened within the existing Mothercare (and former Children's World) unit at Parkgate Shopping in Rotherham. It was the brand's first outlet store in the UK. In 2015 the unit was subdivided and fellow retailer Smyths Toys took 15,000 sq ft of space.

Parkgate saw the closure of nursery retailer Mamas & Papas in 2015 which followed on from the closure of the large Kiddicare unit in 2014. With no sign of a deal, Rotherham-based retailer Maplin is also set to close its Parkgate store.

Mothercare website

Images: Parkgate Shopping

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