Mothercare has confirmed the rumours that it is looking to propose a Company Voluntary Arrangment (CVA) in June of this year. In a shock move it has also brought back the ex Chief Executive Martin Newton Jones who was ousted following a poor Christmas trading period.
The company employs 3000 people across 137 outlets and it is expected that about 800 jobs will go.
Chairman Clive Whiley said: "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.
Any CVA to work will need the support of the creditors and also their confidence in the board to deliver the changes that are needed.
As part of the restructuring, Mothercare has also announced a refinancing package worth up to £113.5 million.
It comprises £28 million through an equity capital raising, an extension of its existing debt to £67.5 million, £18 million in shareholder and trade partner loans.
So what has happened at Mothercare?
Like so many retailers Mothercare has suffered from falling consumer spending, expensive stores and the rise of online shopping. It has also been reported that it has lost sight of its customers as the brand and its shops were mocked on social media when a customer pointed out that you cannot actually go around their shops pushing a double buggy as you get stuck in the aisles.