Mothercare, a renowned retailer specializing in baby and kids products, has provided an update on its transformation plan as it works towards its recovery strategy. One of the major changes within the company is the immediate departure of CEO Mark Newton-Jones, who will continue as an executive director until July. Glyn Hughes, the CFO who has been involved in the company’s restructuring, has been appointed as interim CEO.
The shift from being a retailer and franchisor to a 100% franchise model has brought significant changes to Mothercare’s leadership team. As a result, executive chairman Clive Whiley will transition to a non-executive chairman role from March 29. Andrew Cook, who has served as the corporate development director since April 2019, will take on the position of CFO.
Whiley emphasized that these changes align the management of Mothercare with its new structure as an international franchise brand. The company aims to reduce overhead costs and attract relevant skills and expertise to accelerate its development as an international brand owner and operator.
Mothercare’s overall strategy is to operate profitably as an international franchise business, generating revenue through an asset-light model in more than 40 international territories. The company believes that the risks associated with implementing its transformation plan have largely dissipated, and it is now focusing on managing the execution risk as it reboots its business model and financial structure.
The next significant step for Mothercare is its exclusive brand franchise agreement with Boots, which was announced on December 13. The company is currently finalizing detailed contractual arrangements with Boots, and the partnership is expected to last five years. Furthermore, Mothercare is making progress with its planned recapitalization by raising £8.7 million from existing investors and reducing its bank debt through the administration filing of Mothercare UK Limited. The company is also exploring options to complete the recapitalization of its business.
However, the stock clearance and liquidation of Mothercare UK did not generate the anticipated amount of revenue. As a result, the company may have an obligation to make up for a £10 million shortfall in certain loans. Despite this setback, Mothercare remains determined to succeed as an international franchise brand and is focused on its recovery plan.