Mothercare in ongoing funding discussions amid cost cutting

Mothercare continues to discuss it funding requirements with prospective lenders and reduce its cost base while it shifts to an international franchise operation.

In a statement detailing progress on its transformation plan the company was unable to yet confirm the securing of the necessary borrowing but it did reveal that its costs were reducing as a result of an agreed sub-lease on its Daventry warehouse and an agreed move to a smaller, more cost-effective, head office in early August.

Mothercare also stated it was engaged in constructive ongoing discussions with its existing international franchise partners to establish a more sustainable and less capital-intensive business – effective from Autumn/Winter 2020 – and also with Boots to finalise details of its appointment as Mothercare’s UK franchise partner.

The company also revealed that its interim CEO Glyn Hughes had ruled himself out of the search for a new permanent leader but that good progress is being made with the task, which has reached the shortlist stage.

Clive Whiley, chairman of Mothercare, said: “I would like to thank our colleagues, franchise partners, manufacturing partners, lender and all stakeholders for their continued support in these most extraordinary of times. As a result of their support, we remain on track with the plans we set out at the end of March. We are finalising our arrangements with both our existing franchise partners and Boots as our new UK franchise partner and will make further announcements in due course. Our discussions with various other financing partners also continue constructively.”

He also confirmed that around two-thirds of Mothercare’s global franchise partners’ stores are now open following the lockdown arrangements in each country.

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