Mothercare appoints administrators as high street retail faces “a near existential problem”

Mothercare is to wind down all 79 of its UK stores after PwC were appointed as administrators for the high street retail chain.

Zelf Hussain, David Robert Baxendale and Mark James Tobias Banfield of PwC were appointed as joint administrators of Mothercare UK, and Mothercare Business Services on Tuesday 5 November.

The entities in administration employ 384 distribution and head office staff and 2,485 retail staff.

Hussain said: “No-one is immune from the challenging conditions faced by the UK retail sector.

“Like many other retailers, Mothercare has been hit hard by increasing cost pressures and changes in consumer spending.

“It’s with real regret that we have to implement a phased closure of all UK stores. Our focus will be to help employees and keep the stores trading for as long as possible.”

Clive Whiley, chairman of Mothercare, said that the UK high street was facing “a near existential problem” with “intensifying and compounding pressures” predominantly the “high levels of rent and rates and the continuing shifts in consumer behaviour from high street to online”.

“Mothercare UK is far from immune to these headwinds despite the strength of the Mothercare brand, its exclusive and quality product range and recognised customer service,” he said.

“Despite the changes implemented over the last 18 months contributing to a significant reduction in net debt over the same period, Mothercare UK continues to consume cash on an unsustainable basis.”

In 2015 Mothercare extended its national distribution contract with DHL Supply Chain for a further five years, extending a 25-year relationship.

A spokesperson for DHL Supply Chain said: “Following today’s news, in the coming weeks we will offer every assistance to Mothercare’s administrators to maximise the possibility of the business having an ongoing and successful future, while doing our utmost to safeguard our colleagues on the account. In the short term, we will work with the administrator to support deliveries to customers who have already placed orders.”

By Christopher Walton