What’s gone wrong at Mothercare?

Image copyright Newscast

Baby goods retailer Mothercare says it is finalising a salvage deal with its creditors after years of falling marketings and profits.

The restructuring is likely to take the form of a company voluntary arrangement( CVA ), which typically appreciates a retailer closing stores and renegotiating rents to prevent it from going to get administration.

It comes after the maternity expert slashed its profit forecast in January and entered talks with creditors to avoid violating the terms of its loans.

So what went wrong at the 57 -year-old chain, and can it become its fates around?

1) Rising competition

Stephen Springham, head of retail research at property consultancy Knight Frank, has been following Mothercare’s progress for 20 times. He mentions even in the late 1990 s the brand wasn’t doing particularly well.