Mothercare to move to smaller head office
Mothercare has unveiled plans to move its head office to a smaller and more cost effective site in early August.
The retailer has also agreed terms for a surrender of the lease on its current head office in Watford. The move will reduce its costs by around £900,000 per year.
In a further cost saving exercise, Mothercare has agreed to sublease a substantial part of its main Daventry warehouse to a third party on a short term basis for a minimum of four months. The facility previously served the retailer’s UK business which entered into administration last November. Mothercare expects the sub leasing to save the business aproximately £220,000 per month.
Clive Whiley, Mothercare chairman, said: “We have carefully managed our business over the past three months, to mitigate the impact of the Covid-19 pandemic on our cash flows and liquidity during this period of global crisis which is reflected in our unchanged bank debt position since March.
“Whilst we have not been immune to temporary store closures in almost all of our territories over the period, I am pleased that we are seeing the reopening of our partners’ stores. At the same time, we continue to take action to reduce our cost base and address legacy issues, helping with our return to being a profitable and sustainable business.”
Giving an update on progress with its transformation strategy, Mothercare said it is continuing to make significant progress with plans to make the business a profitable international franchise operation operating in around 40 international territories. It is also in the process of finalising contractual arrangements for Boots to become its UK franchise partner.
Whiley added: “I would like to thank our colleagues, franchise partners, manufacturing partners, lender and all stakeholders for their continued support in these most extraordinary of times. As a result of their support, we remain on track with the plans we set out at the end of March. We are finalising our arrangements with both our existing franchise partners and Boots as our new UK franchise partner and will make further announcements in due course. Our discussions with various other financing partners also continue constructively.”
The retailer also said that it is making good progress with the search for a new permanent chief executive and is now at the shortlist stage.
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