Operating stores will close over the coming weeks and months, with the potential loss of 2485 retail jobs and 384 head office positions. Further losses will be seen at warehouses and call centres.
Zelf Hussain, an administrator at PwC, said: “It’s with real regret that we have to implement a phased closure of all UK stores. Our focus will be to help employees and keep the stores trading for as long as possible.
“This is a sad moment for a well-known high street name. No-one is immune from the challenging conditions faced by the UK retail sector.”
The administration will not affect overseas trading for the company. Over 1000 sites currently operate across 40 countries, and these sites generated £28.3m in international profits the previous financial year.
Meanwhile, UK retail operated at a loss of £36.3m, despite a previous CVA scheme that saw the closure of 55 UK stores.
As UK stores begin their closure over the coming months, overseas operations will continue to operate under franchise agreements.
Clive Whiley, chairman of Mothercare, said: “It is with deep regret and sadness that we have been unable to avoid the administration of Mothercare UK and Mothercare Business Services, and we fully understand the significant impact on those UK colleagues and business partners who are affected.
“However, the Board concluded that the administration processes serve the wider interests of ensuring a sustainable future for the Company, including the wider Group’s global colleagues, its pension fund, lenders and other stakeholders.”
He added: “The UK high street is facing a near existential problem with intensifying and compounding pressures across numerous fronts, most notably the high levels of rent and rates and the continuing shifts in consumer behaviour from high street to online.
“Mothercare UK is far from immune to these headwinds despite the strength of the Mothercare brand, its exclusive and quality product range and recognised customer service.
“Despite the changes implemented over the last 18 months contributing to a significant reduction in net debt over the same period, Mothercare UK continues to consume cash on an unsustainable basis.
“The action announced today has been carefully thought through and without it, the existence of the wider Group would be threatened.
“We know it is right for the wider Group to ensure that Mothercare remains the leading global brand for parents and young children with a bright and solvent future within the international franchise business.”
The company first opened its doors in 1961, and was a leading purveyor of mother and child goods on the high street. Recent years saw the brand struggle to compete with the rise of online shopping, as well as cheaper alternatives in supermarkets and high street stores.