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Mothercare confirms 50 closures in rescue plan

Mothercare confirms 50 closures in rescue plan

In another surprise move, Mothercare has reappointed Mark Newton-Jones, the chief executive who was sacked last month after a big fall in sales over the Christmas trading period and a profits warning. Reports suggested Mr Whiley had been a key player in pulling together a rescue deal and forming the restructuring plans.

The Dublin-based retailer has been quick to distance itself from its troubled namesake after Mothercare UK, which has already nearly halved the number of stores it has in the past five years, said that its financial outlook was "perilous" and that it will be closing another 50 stores in Britain, and putting 800 jobs at risk.

The retailer, meanwhile, stresses that its recent financial performance, impacted in particular by a large number of legacy loss making stores within the United Kingdom estate, has resulted in an unsustainable situation.

Mr Newton-Jones was ousted in early April by chairman Alan Parker, who has himself since left the business.

Thursday's deal will involve an eventual United Kingdom store target of 73, while its £67m banking facilities, provided by Barclays and HSBC, would be extended until 2020.

"But like many other traditional retailers, in recent years the group has been adversely affected by the consumer shift to online shopping, as well as the trend of declining footfall".

Recently Maplin and Toys "R" Us announced they were going into administration, while teen accessories shop Claire's Accessories has also filed for bankruptcy.

The retail giant said on Monday that it had been working on a comprehensive restructuring and refinancing package. The company will disclose details of the restructuring plan along with full year earnings on Thursday a source said

The chain which sells mother, baby and toddler products is the latest retailer to announce substantial store closures.

"These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the United Kingdom and internationally".

It has also had to contend with surging wage costs and eye-watering business rate hikes.

As part of the restructuring, Mothercare has also arranged a refinancing package worth up to £113.5m.

Richard Lim, chief executive, Retail Economics said: "This is turning out to be a year of distress for the retail sector".

Its plans to raise more than that amount by issuing new shares will require investor support.

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