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Mother(care) doesn’t always know best

Mother(care) doesn’t always know best

In a tough time for retail, Mothercare’s collapse is not surprising. However, it will still leave a large gap in the ever-diminishing high street.

Sean Moran, a partner in our restructuring, recovery and insolvency team, said:

“Mothercare’s administration may have been expected, but that doesn’t make it any less devastating for its employees and creditors. The retailer has been a constant presence on the UK high street since the 1960s and is sure to be a loss felt by many.

“If any lesson can be learnt from this collapse, it’s that a CVA alone will not help a business to survive. Unless the fundamental issues of a business are fully addressed, it will continue to fail.

“The main problem faced by Mothercare was its outdated nature. It just could not compete with the lower prices and online capabilities of supermarkets and other competitors. Essentially, it sealed its own fate by failing to adapt to the modern retail environment.

“Overseas, Mothercare is much more successful. It is likely that the business will turn its focus to these more profitable stores in order to keep the brand alive. For creditors and suppliers, it is vital that this unfortunate situation is addressed without delay, as it is certainly not guaranteed to improve. By opening a dialogue with Mothercare’s administrators, those in the supply chain can gain a level of clarity and ensure their finances are impacted as little as possible.”

For further information or advice on any of the issues highlighted, contact Sean Moran on 0116 257 4410 or sean.moran@shma.co.uk. A member of our insolvency team can walk you through everything. Click here to discuss.