Mothercare's UK businesses fall into administration

The British retailer has seen its sales fall across the country, but maintains a profitable international business.

    Baby and maternity product retailer Mothercare has handed control of its businesses in the United Kingdom to international advisory and audit firm PricewaterhouseCoopers [Andrew Yates/Reuters]
    Baby and maternity product retailer Mothercare has handed control of its businesses in the United Kingdom to international advisory and audit firm PricewaterhouseCoopers [Andrew Yates/Reuters]

    Mothercare on Tuesday gave control of its loss-making units in the United Kingdom to administrators and laid out a range of steps to return to profitability, as the struggling baby products retailer fights to stay afloat in a failing UK retail sector.

    The company's UK sales have been hammered by intense competition from supermarket groups and online retailers as well as by rising costs.

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    Mothercare, which has been hit hard by intense competition from supermarkets and online retailers in its main domestic market, said that it appointed PricewaterhouseCoopers (PwC) as the administrator to its trading units, Mothercare UK Ltd and Mothercare Business Service.

    "UK high street is facing a near existential problem with intensifying and compounding pressures across numerous fronts," the company said.

    The group also has a profitable international business, with over 1,000 stores in more than 40 territories.

    The company said that it appointed ‍Zelf Hussain, Toby Banfield and David Baxendale of PwC to lead the units' administration process.

    Mothercare also said that its ‍existing 24 million pounds ($31m) in bank debt facilities would be paid down by the administration process, and that about 50 million pounds ($64m) of cash was available from third parties.

    Mothercare, which was floated in 1972 and has been a mainstay of the British shopping scene, said it expects to return to being a cash generative and profitable business in the fiscal year 2021.

    SOURCE: Reuters news agency