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Newscast

Mothercare’s plan to close dozens of stores has been derailed after the struggling retailer admitted it got its sums wrong.

Last Friday the company said lenders had backed a restructuring plan that included closing 50 stores.

However, Mothercare said it now realised that plans for its Childrens World division had not been approved by the necessary 75% majority.

The baby goods retailer will now consider all options for the business.

The Childrens World division accounts for 21 of Mothercare’s 152 stores.

Creditors voted separately on a company voluntary arrangement (CVA), which allows companies to shut loss-making shops and reduce rents for the company’s three subsidiaries: Mothercare UK, Early Learning Centre, and Childrens World.

Mothercare said the vote had failed “by a very narrow margin” at 73.3%, meaning the Childrens World CVA proposal would not progress further.

The retailer said the announcement would not affect its other restructuring plans.

Mothercare has nearly halved its store numbers over the past five years. It had intended to have 92 outlets by 2023, but has now accelerated its closure plans and will have just 73 by that year.

The company plunged to a £72.8m loss in its most recent financial year, as it took hefty charges to pay for closing stores and reorganising the business amid a 1.3% decline in like-for-like sales.

CVAs have become commonplace this year as a number of big high street names struggle to stay afloat.

Earlier this year, toy store chain Toys R Us collapsed into administration, as did electronics retailer Maplin.

Carpetright has entered into a CVA and announced store closures, along with fashion chain New Look.

A number of reasons have been cited for failures on the High Street, including a squeeze on consumers’ income, the growth of online shopping and the rising costs of staff, rents and business rates.‎



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