Creditors approve Mothercare CVA plan: stores, staff to be culled
Creditors have given the green light to the Mothercare CVA plan which will lead to the closure of 49 stores and the axing if hundreds of jobs.
The company voluntary arrangement was revealed last month after the company posted a £72.8 million loss last financial year, despite the closure of more than half its stores over the past five years. The company admitted then it was in a “perilous” position.
More than 75 per cent of creditors approved the plan – necessary for its implementation. As well as the closures, the embattled retailer will seek rent reductions on 21 store sites.
The Mothercare CVA will not affect day-to-day operations with all stores continuing to trade for the time being.
Part of the CVA is a £113.5 million refinancing package, including £28 million raised through the sale of new shares, and revised debt facilities.
“We are very grateful for the support of our many stakeholders across our creditor base in supporting today’s CVA proposals,” said Clive Whiley, a turnaround specialist appointed acting executive chairman less than two months ago to help rescue the business.
“These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally.”