After closing all 79 of its stores last weekend, collapsed retailer Mothercare has this morning announced wholesale changes to its leadership.
Following on from November’s transformation plan, when the group announced plans to become an international franchise operation, the firm today said that chief executive Mark Newton-Jones would step down.
He will remain as an executive director until July whilst former finance chief Glyn Hughes will step up to become interim chief executive.
The firm is bringing in Andrew Cook to the main board as chief financial officer, after a spell as Mothercare’s corporate development officer.
He has held similar roles at Stanley Gibbons Group in the past.
Long-standing chairman Clive Whiley, who was central in saving the high-street chain, will become the group’s non-executive chair, in a sign that Shore Capital Markets analysts say shows “that this business is just about back on the straight and narrow”.
While the transformation is “daunting”, analysts added that once the firm was settled “we see the energies of management more productively becoming focused on the day job to deliver value for shareholders”.
In November Mothercare fell into administration despite a rescue plan being agreed in 2018. In December administrators were appointed for its stores around the country.
At the time the company’s bosses said that it was “not capable of returning to a level of structural profitability”.
A bad first half update, with losses falling to £21.2m by the end of October, further compounded the high street retailers woes.
In addition to the leadership changes, the firm today said that it was broadly on track with its planned recapitalisation.
The company has raised £8.7m from existing investors, as well as placing £3.2m in additional equity. It has also agreed a temporary £15m increase in its trade partner facility.
Whiley said: ”The board changes announced today align the management of Mothercare with that of a its new structure as an international franchise brand and will contribute to a further overhead reduction.
“In time we plan to add relevant skills and expertise – particularly in brand and product management – to the team to accelerate our development as an international brand owner and operator.”
Under the new plan, Boots will become Mothercare’s exclusive franchisee in the UK. Russ Mould, investment director at AJ Bell, called the move “a step in the right direction”.
He added: “The company still has some choppy waters to navigate but you could see this working in the long run given the residual strength of the brand and its position in an attractive niche, where new parents and their families are often willing to spend significant sums of money.”
“However, it’s hard not look back and think that all this effort and shareholder pain could have been avoided if the company had just accepted a £266m offer from US rival Destination Maternity back in 2014.”