Mothercare’s (LON: MTC) restructuring plan was rejected by creditors, leaving a further 300 jobs at risk.
The struggling group said on Monday that reduction proposals for 21 stores had been turned down by landlords and creditors.
Shares in the group were down over four percent on Monday afternoon following the news.
The retailer said on Friday that it had won the backing of creditors and landlords to commence with the CVA, however, plans for Children’s World were rejected by 73.3 percent of those who voted – 75 percent of the vote was required.
“KPMG have confirmed the votes relating to Mothercare UK and Early Learning Centre CVAs passed by a clear majority, however it is now clear that the CVA of Children’s World was not carried by creditors by a narrow margin,” said Clive Whiley, Mothercare’s executive chair.
“This will neither unsettle the UK restructuring and refinancing nor jeopardise our future transformation plans, which are already under way. As a board, we are now considering our next steps with respect to Children’s World.”
News of the closures came a few days following permission for the group to close 50 underperforming stores, risking 800 jobs.
Clive Whiley, the interim executive chairman, said the deal was a “crucial step forward to achieve the renewed and stable financial structure for the business that will drive an acceleration of Mothercare’s transformation”.
The group has been in turmoil following £72.8 million loss in its most recent financial year.
CVAs are becoming increasingly common on the high street as retailers are struggling to make a profit.
In 2018, Maplins and Toys R Us both fell into administration. Retailers Carpetright and New Look have entered into CVAs and announced store closures.
