Mothercare shut down its UK stores earlier this year, and now operates through franchise partners to sell its products.

Mothercare gives up head office in attempt to save £1m after lockdown

A UK mothering retailer has announced that it will be moving to smaller offices as it aims to save more than £1m in the aftermath of lockdown.

Mothercare, currently based in Watford, will be surrendering its lease on its current head office and relocating to a “smaller and more cost effective” location, which it predicts will reduce costs by approximately £900k per year.

The company, which went into administration in November last year, is also subletting part of its main warehouse to a third party, which will reduce its costs by a further £220k.

It is currently in talks will prospective debt providers regarding entering into new facilities, and reported that its total secured debt was £18m.

However, it said that it is still “on track to become a profitable international franchise operation”, and it is now operating in 40 international territories.

Clive Whiley, chairman of Mothercare, commented: “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.

“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.”

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