Mothercare’s problem UK child on brink of collapse

LONDON, Nov 4 (Reuters) – Struggling baby products retailer
Mothercare MTC.L is set to appoint administrators to its
loss-making British business, putting about 2,500 jobs at risk
and dealing yet another blow to the country’s beleaguered retail

Mothercare’s UK sales have been hammered by intense
competition from supermarket groups and online retailers as well
as by rising costs. The group also has a profitable
international business, with over 1,000 stores in over 40

Shares in the group were down 28% at 0859 GMT on Monday
after it said it was clear the UK retail operations, which trade
from 79 stores, were not capable of returning to a level of
profitability that was sustainable for the group as it currently

“Furthermore, the company is unable to continue to satisfy
the ongoing cash needs of Mothercare UK,” it said.
The group said notices to appoint administrators to its
trading subsidiary, Mothercare UK Limited and to Mothercare
Business Services, which provides services to Mothercare UK,
will be filed with the court.

Notices of intent to appoint administrators give companies
protection from creditors for ten days before potentially
tipping into them into administration.

Mothercare said the company and its other subsidiaries were
not covered by these notices and it will be free to continue to
trade in the normal course of business.

In the year to March 2019, the Mothercare brand generated
profits of 28.3 million pounds internationally whereas the UK
retail operations lost 36.3 million pounds.

The stock was down 3.18 pence at 8.32 pence at 0859 GMT,
valuing the group at 27.8 million pounds.

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