Nearly 3000 workers affected as Mothercare falls into administration

November 6, 2019 @ 8:18 by Steven Hugill

Nearly 3000 workers face uncertain futures after a troubled baby goods retailer officially fell into administration.

Mothercare’s 79-strong UK store estate will close after efforts to find a buyer failed.

Administrators PwC described the decision as a “sad moment for a well-known high street name,” revealing the business had been “hit hard by increasing cost pressures and changes in consumer spending.”

The firm’s shop estate – which includes a Gateshead branch – will be wound down over the coming weeks and months, with administrators vowing to “keep stores trading for as long as possible.”

The move comes after officials previously approved measures to close stores, offloaded its Early Learning Centre arm and streamlined head office operations in an attempt to readdress the loss-making business’ fortunes.

However, joint administrator Zelf Hussain said PwC was left with little alternative for the operation, which made £36.3 million losses in the year to March 2019, after years of struggling against lower customer spending amid an evolving shopping market.

“This is a sad moment for a well-known high street name; no-one is immune from the challenging conditions faced by the UK retail sector,” said Zelf, who is a partner at PwC.

“Like many other retailers, Mothercare has been hit hard by increasing cost pressures and changes in consumer spending.

“It’s with real regret that we have to implement a phased closure of all UK stores.

“Our focus will be to help employees and keep the stores trading for as long as possible,” he added.

The administration also includes Mothercare Business Services Limited, which provides services to Mothercare UK.

The company’s global stores, in more than 40 overseas territories, are not affected by the administration.

Mothercare’s UK demise adds further woes to Britain’s retail sector, which has been rocked by a number of failures and restructures over the last couple of years.

Collapses at Toys ‘R’ Us, Maplin and Poundworld were followed by high-profile store closures at House of Fraser, Debenhams and Marks & Spencer, the recent administration of Bonmarché and rescue of the Karen Millen and Coast brands by Boohoo.

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