• Home
  • News
  • People
  • Mothercare to bring back Mark Newton-Jones as CEO

Mothercare to bring back Mark Newton-Jones as CEO

By Prachi Singh

loading...

Scroll down to read more

Putting media speculations to rest, Mothercare has confirmed measures to refinance its business and restructuring of its UK store portfolio. The company said that the comprehensive debt and equity refinancing will provide funding of up to 113.5 million pounds (153 million dollars). The UK restructuring measure will see Mothercare exit from 50 stores by June 2019 to achieve a targeted estate of 78 stores by 2020. The company also confirmed Mark Newton-Jones is returning as Chief Executive Officer and that the current CEO David Wood has been named the Group Managing Director.

Commenting on today's refinancing and UK restructuring, Clive Whiley, the Company's Interim Executive Chairman, said in a statement: "‎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. These comprehensive measures provide a renewed and stable financial structure for the business and will drive a step change in Mothercare's transformation."

Mothercare to exit 50 store by June 2019

The company further added that the UK restructuring plan will involve an accelerated reduction of the UK store estate to reduce losses and rent liabilities and will be effected through the CVA Proposals.

Mothercare said that the process to implement the CVA Proposals is expected to complete in July 2018 with the CVA creditor meetings expected to be held on June 1, 2018. The CVA Proposals and supporting management actions, once completed, are expected to result in a resized store estate with 50 stores to be exited, and material rent reductions on a further 21 stores, a stabilised financial performance through cost savings and/or eliminated losses, at least 10 million pounds cash inflow from store closures and working capital initiatives, further cost savings of at least 5 million pounds as the business is right sized and total store portfolio of 78 stores by FY20 and 73 in FY22 from 137 stores today.

Mothercare said in a statement: “Recent financial performance, impacted in particular by a large number of legacy loss making stores within the UK estate, has resulted in a perilous financial condition for the Group. Given the financial position, the board instigated a full financial review. The financial review concluded that delivering the Refinancing and the UK Restructuring represent the most viable option to establish a sustainable future for Mothercare.”

Mothercare explores refinancing option

The refinancing option of 113.5 million pounds comprises: a proposed equity capital raising of 28 million pounds (37.8 million dollars) expected to be launched in July 2018 by way of a firm placing, placing and open offer, revised committed debt facilities of 67.5 million pounds (91.2 million dollars) with a final maturity extended to December 2020 and the revised debt facilities, new 8 million pounds (10.8 million dollars) of shareholder loans, a new debtor backed facility of up to 10 million pounds (13.5 million dollars) from one of the company's trade partners.

The company further said that the shareholder loans and the trade partner loan will provide immediate access to up to 18 million pounds (24.3 million dollars) of additional liquidity which Mothercare expects to fully meet the company's short term liquidity requirements, represent a strong signal of commitment and support from the company's largest shareholders and trade partners, alongside the company's existing lenders, to support Mothercare through this process.

MotherCare