Baby goods retailer Mothercare boss, Mark Newton-Jones, has announced that he will invest £400,000 of his own money in the company’s planned £100m rights issue, insisting the mother and baby goods specialist has a future in the UK.
He said the entire board and executive team had committed to taking up shares in the massive rights issue which will fund the closure of loss-making stores as well as IT investments and debt repayments in the latest attempt to revive the ailing retailer.
"We are all putting our money into the business. It is important that while we are asking shareholders to invest in the future of Mothercare we are doing it ourselves. It is a great business turnaround, Jones told The Guardian.
The group’s UK arm usually generates around 60% of revenue but has lost £68m in past three years.
Mothercare has managed to cut costs by shutting 153 unprofitable stores. Presently, the retailer has 220 stores with two-thirds on the high street.
The retailer further plans to shut between 50 and 75 more branches by the end of the next financial year at a cost of £25m and shift its focus to out-of-town stores rather than high street locations.
The closures will include almost all Early Learning Centre stores, although the brand will continue to produce toys for sale online and in 120 departments in Mothercare shops.
Seperatley, Mothercare is planning to trial two new store designs this autumn, in a bid to revive the retailer on the back of a £100m rights issue.
Jones was quoted by The Telegraph that: "By modernising and transforming the UK into a digitally-led business supported by a modern store estate we will underpin the growth of the group’s successful international business.
"Our ambition is for Mothercare to become the leading global retailer for parents and young children."