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| Mothercare UK administration plan threatens 2,500 jobs | |
| (32 minutes later) | |
| Baby goods retailer Mothercare has said it plans to call in administrators to the troubled firm's UK business, putting 2,500 jobs at risk. | |
| Mothercare said its 79 UK stores were "not capable of returning to a level of structural profitability and returns that are sustainable for the group". | Mothercare said its 79 UK stores were "not capable of returning to a level of structural profitability and returns that are sustainable for the group". |
| "Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK," it added. | "Furthermore, the company is unable to continue to satisfy the ongoing cash needs of Mothercare UK," it added. |
| It said stores would continue to trade as normal for the time being. | It said stores would continue to trade as normal for the time being. |
| Also affected is Mothercare Business Services Limited (MBS), which provides certain services to Mothercare UK. | |
| 'Necessary step' | |
| Mothercare has already gone through a company voluntary arrangement (CVA), which allowed it to shut 55 shops. | Mothercare has already gone through a company voluntary arrangement (CVA), which allowed it to shut 55 shops. |
| "These notices of intent to appoint administrators in respect of Mothercare UK and MBS are a necessary step in the restructuring and refinancing of the Group," Mothercare said. | |
| "Plans are well advanced and being finalised for execution imminently. A further announcement will be made in due course." | |
| Only 500 of the jobs at risk are full-time posts, including head office roles, with 2,000 part-time. | |
| Mothercare has been looking for a buyer for the UK stores, but with no success so far. | |
| The company also operates in more than 40 overseas territories, which are not subject to administration. | |
| Mothercare said that in the financial year to March 2019, its international business generated profits of £28.3m, whereas the UK retail operations lost £36.3m. | |
| The move comes as High Street retailers continue to face tough times amid a squeeze on consumers' income, the growth of online shopping and the rising costs of staff, rents and business rates. |