Preston's Mothercare to close after administration woes
The company went into administration on Monday (November 4), putting 2,500 jobs in the UK at risk.
Administrators have now announced the retailer will close all its 79 shops in the UK.
The announcement on Tuesday evening (November 5) came as the mother and baby retailer revealed it is holding last-ditch talks with potential partners as it battles to keep its brand in the UK and had raised £3.2 million from shareholders.
Zelf Hussain at administrator PricewaterhouseCoopers (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."
The retailer filed a notice to appoint administrators for the UK division on Monday.
However, it is still holding discussions "to ensure that the group has an ongoing retail presence in the UK", the company said on Tuesday.
The group is understood to be looking at options which could include finding a partner to keep the Mothercare brand alive online, or a supermarket that has space to sell Mothercare-branded products.
Mothercare said it had raised £3.2 million from a group of existing investors, including its biggest shareholder, sheep farmer and investment banker Richard Griffiths.
In his first remarks since the crisis started on Monday, chairman Clive Whiley said British high streets were facing "a near existential problem" with high rents and customers deciding to shop online.
"Mothercare UK is far from immune to these headwinds," he said, adding it had been burning through cash.
"It is with deep regret and sadness that we have been unable to avoid the administration," Mr Whiley added.
Earlier on Tuesday, it was revealed that the company is set to move the pension schemes for its troubled UK business into its profitable parent group.
The company is understood to be finalising a deal to move the pension schemes of its UK employees from the troubled arm as part of a new funding plan to preserve benefits for its scheme members.
Mothercare is in talks with pension trustees over a potential agreement to move the schemes into the global parent group, which has continued to trade profitably despite its UK woes.
A deal would stop the funds being placed into the UK Pension Protection Fund (PPF).
If the pension schemes enter the industry-funded support system, it could mean significant cuts to future retirement benefits.
The UK's Pensions Regulator is understood to have been kept informed about the latest developments, which were first reported by Sky News.
The firm has two pension schemes in the UK, which between them have nearly 6,000 members. The schemes had a deficit of £139 million when they were last valued in 2017.
On Monday, Mothercare said it has undertaken a review of the UK business and found that it is "not capable of returning to a level of structural profitability".
It said the business is therefore unable to satisfy the cash needs of the UK arm and is therefore filing the notice as part of the restructuring and refinancing process.
In the UK, Mothercare had already closed 55 stores over the past year in a desperate bid to keep the business afloat.
A spokesman for The Pensions Regulator said: "We are holding detailed discussions with the scheme trustees, advisers and the PPF to understand the implications of recent developments and to ensure the interests of members are protected to the fullest extent possible. We will not comment further."