Mothercare is going into administration, and experts have dubbed the move as “devastating”. Twitter users are lamenting the loss of the high street staple, and many blamed austerity.
One wrote: “So #Mothercare is the newest collapse? I think we need to start blaming things other than the online stores, because I’m pretty sure buying baby stuff online is far more expensive. Maybe austerity and the f****** price hikes thanks to the government?”
Another said: “Austerity squeezed people’s purchasing power and turned town centres to economic deserts – Now Mothercare is teetering & plans to appoint administrators.”
“I remember going into mothercare in Watford as a kid and I would always go up to the talking tree to say hi,” one wrote sadly.
Some blamed the company itself, however. One wrote: “V sorry 4 staff of #Mothercare but their model was always lacking. A maternity store w no feeding facility, not even a chair to sit on, no ‘children/spare partner’ corner. Nothing to make the experience of shopping stresss free or comfortable. Just rows of clothes…”
“#Mothercare only has themselves to blame. Always been way more expensive than supermarkets,” another said.
According to reports, Mothercare is attempting to sell its British business. However, the company generally is faring better overseas.
This means all 2,500 of Mothercare employees could face redundancy after the retailer made losses of £36.3 million last year.
The company has already closed a large number of its stores, with the overall number shrinking from 137 in May 2018 to 79 by the end of March 2019.
In summer 2018 it was revealed a number of Mothercare stores would close down.
Fifty under-performing stores will close, so which are they?
Mothercare UK store closures – full list
The full list announced was:
- Fort Kinnaird
- Bangor Northern Ireland
- North Shields
- Crystal Peaks
- Kings Lynn
- Grafton Cente Cambridge
- Holloway Road
- Croydon 187
- Colliers Wood
- Reading 246
- Newport, Wales
- Weston Super Mare
- Plymouth (although a relocation is planned)
- Newport Isle of White
- plus Early Learning Centres in Plymouth and Harrogate
READ MORE: Is your local Mothercare closing down? [FULL LIST]
Sean Moran, insolvency partner at law firm, Shakespeare Martineau, told Express.co.uk: “Mothercare entering into administration is devastating – if unsurprising – news for both its employees and its creditors. The retail stalwart could soon become yet another fading memory on the UK high street.
“This collapse goes to show that CVAs cannot fix everything if fundamental problems faced by a business aren’t addressed properly. Mothercare has become something of an outdated brand that suffers from intense competition – even the name itself speaks of another time.
“Baby’s and children’s clothing can only be used for a short time before new sizes are needed and the retailer just couldn’t compete with the lower prices and online capabilities of its competitors. Mothercare has essentially been hit by its own failure to adapt to the modern retail environment.
“The only way for the Mothercare brand to survive is to focus on its profitable stores overseas. The CVA saw the closure of 55 shops, and now the UK high street may lose further stores from the remaining portfolio. It is of the utmost importance that creditors and suppliers tackle this situation head on, rather than waiting and hoping for things to improve. Opening a dialogue with Mothercare’s administrators as soon as possible is vital to weathering the storm and ensuring that parties across the supply chain aren’t left high and dry, and out pocket.”
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Freddy Khalastchi, business recovery partner at accountancy firm, Menzies LLP, commented:
“This decision shows that for retailers in financial distress, CVAs don’t always equal a happy-ever-after, and they are no substitute for a radical rethink of the UK High Street.
“Despite Government figures suggesting that only about one in three CVAs are successful, this is yet another high-profile example of the process failing to turn a retailer’s financial fortunes around.
“A further CVA can’t be ruled out because it is one of the options available in an administration, but what is clear is that Mothercare’s initial attempts at cost reduction didn’t go far enough. Otherwise, it may be that revenue from its remaining stores was insufficient to support its head office and other overheads.
“While more struggling retailers are clutching onto CVAs as a means of restoring profitability, it’s important to recognise that they work where stores already have a viable business model, otherwise they are only a temporary sticking plaster solution.
“Exploring experiential retail methods, reacting to changing consumer habits and a strategic rethink will be required to weather the storm facing the sector.”
Last year chief exec Mark Newton-Jones said: “We will really be able to speed up the transformation, and by God we need to speed up the transformation, because the retail landscape is pretty brutal at the moment.
“Alongside the fundraising, we have been very busy on numerous fronts to restructure the Group for future profitability.
“Whilst the lack of full approval for the Childrens World CVA was disappointing, we have now found a solution which allows us to go further and faster with the right-sizing of our store portfolio.
“We have also identified significant areas for further efficiencies and cost savings, which will underpin our return to a sustainable future.”
Debenhams won a battle in the courts to close down 50 stores in the future, leaving thousands of jobs on the line.
Twitter users have expressed disappointment since the plans were announced.
One wrote: “Very disappointing news for Chatham Town Centre with the confirmation that our Debenhams will be one of the 22 stores across the country closing.
“Critical that staff there are given maximum possible support at this difficult time & we cannot see this key location vacant for long.”