Mothercare has gone cap in hand to shareholders to raise £100 million to pay off the company’s £40 million debts, using the remaining cash to close a quarter of its UK stores.
Shares plunged 11 per cent today to 221.2p in reaction to the rights issue. However, management insisted it was the best way to turn around the struggling baby and parent stores.
New chief executive Mark Newton-Jones said: “There was an alternative to take six or seven years to fix the business, which I’m fearful is too long.”
The former boss of Shop Direct, who joined earlier this year, also laid out plans to shut up to 75 stores, and opening 20, continuing previous management’s plans of shifting more shops to out of town locations.
He added: “Many of our stores haven’t been touched for a decade, not even so much as a lick of paint.”Reuse content