Mothercare is to swing the axe on 50 underperforming stores and re-hire the chief executive it sacked just weeks ago as part of a wide-ranging shake-up.
The closures, which will result in hundreds of job losses, will be carried out through a company voluntary arrangement (CVA) – a move which allows companies to close loss-making shops and secure rental discounts.
But the move is centred solely on UK stores and will have no impact on Mothercare in Gibraltar, which is a franchised business.
“The store closures only affect stores in the UK,” a Mothercare spokesman said.
In the UK, Mothercare employs about 3,000 people across 137 outlets.
In a move that will stun many observers, Mark Newton Jones, who was given the elbow as chief executive last month, will return to the fold and once again take the top job.
It is understood he was brought back at the behest of chairman Clive Whiley, himself brought in recently to replace Alan Parker.
The man that had been brought in to replace Mr Newton Jones, David Wood, will now become managing director.
As part of the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.
It comprises £28 million through an equity capital raising, an extension of its existing debt to £67.5 million, and £18 million in shareholder and trade partner loans.
Among the latter figure is a £2 million loan from DC Thomson, publisher of the Beano.
Mr Whiley said the drastic measures provide a “renewed and stable financial structure for the business” and will drive a “step change” in Mothercare’s transformation.
Shares in Mothercare shot up nearly 24% following the announcement.
The shake-up comes alongside a brutal set of annual results.
Mothercare swung to a £72.8 million pre-tax loss in the year to March 24, which compares with a £7.1 million profit in 2017.
On an adjusted basis, pre-tax profits plummeted 88.3% to just £2.3 million.
In the UK, losses swelled from £9.7 million to £79.4 million.