Mothercare (LON: MTC) has announced plans to close 50 stores and risk almost 800 jobs.
Under a rescue plan, the retailer will rehire its former chief executive, Mark Newton-Jones, who was sacked only last month.
The retailer has already almost halved store numbers over the past five years. In initial plans, the retailer intended to have 92 outlets by 2023, however, the group now hopes to have just 73 by that year.
“I’ve never seen anything like this,” said Richard Hyman, an independent retail analyst.
“Who has been leading the decision-making to get rid of Mark Newton-Jones, to support the former chairman and his decision to appoint a successor and then a week later sacking the chairman? This is a publicly listed company and it’s ridiculous. What have the non-executive directors been doing? They all need replacing.”
In the year to 24 March, the group faced £72.8 million in losses after making a £7.1 million profit a year before.
In a statement, Mothercare said: “Recent financial performance, impacted in particular by a large number of legacy loss-making stores within the UK estate, has resulted in a perilous financial condition for the group.”
Mothercare will launch a company voluntary arrangement (CVA), which creditors will vote on 1 June.
News of the rescue deal increased the group’s share price by 24 percent.
However, the future of the group still remains at risk in the current climate, which has seen the administration of Toys R Us and Maplin and major store closures of New Look and Carpetright (LON: CPR)
Mothercare chairman Clive Whiley said: “These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally.”