- Vivian Hendriksz |
London - Maternity and baby specialist Mothercare plc is close to securing a rescue deal that would include raising fresh capital from investors as well as accelerating its store closure scheme.
The struggling retailer said it is in the process of finalising a restructuring and refinancing package that would place its business on a stable and sustainable financial footing for the future in a statement released on Monday. “We are in the final stages of detailing these restructuring plans alongside new committed debt facilities, an underwritten equity issue and access to other sources of capital which we intend to announce with our final results,” said Mothercare.
The maternity and childrenswear specialist is set to publish its full year results on May 17, during which Mothercare’s new chief executive, David Wood, is set to offer more details concerning its rescue plan. Mothercare previously issued a profit warning in January following weak sales during the holiday period. The high street retailer has been struggling against weak consumer spending as well as growing competition from other retailers in the childrenswear market.
Mothercare has been in discussion with its lenders, HSBC and Barclays since March when it announced it was set to breach the terms of its loans and needed to secure external funding for its restructuring plan. Industry insiders have speculated that Mothercare is also set to file for a Company Voluntary Arrangement (CVA) to help speed up the closure of unprofitable stores and cut rent prices.