Mothercare has gone cap in hand to shareholders to raise £100m to pay off the company’s £40m debts, using the remaining cash to close a quarter of its UK stores.
Its shares plunged 11 per cent yesterday 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.
Mark Newton-Jones, the new chief executive, 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 stores to out-of-town locations.
He added: “The store environment has not presented the product well. Many of our stores haven’t been touched for a decade, not even so much as a lick of paint.”Reuse content