Mothercare’s retail business in the Republic is being placed into liquidation with the family that owns the franchise here citing the “unprecedented” impact of Covid-19 on retail sales.
This means its 14 stores in Dublin, Cork, Drogheda, Dundalk, Galway, Limerick, Newbridge and Portlaoise, Sligo and Tralee will not reopen, and that 197 staff will be made redundant.
Staff were informed of the decision yesterday, with Tony McBride of FLC Frank Lynch & Co lined up as liquidator. A meeting of creditors will be held on June 22nd.
The Mothercare business, which sold a range of products for babies and young children, has been operated in Ireland since 1992 by the Ward family, under franchise from the British business of the same name. Its range includes prams, car seats, children's clothing, toys and maternity wear.
It is understood that Mothercare expected its sales to decline by 40 per cent this year, leading to losses of about €3 million. The company had been selling products online following the introduction of lockdown restrictions but this stopped earlier this week, with the final orders fulfilled on Thursday.
Latest accounts for Mothercare show it made a profit of €105,768 in the year to the end of March 2019, down from €135,961 a year earlier.
This is the latest in a series of blows to the Irish retail sector, with Debenhams, Monsoon, Oasis and Warehouse among the businesses that have not reopened following the imposition of lockdown restrictions in March to contain the spread of Covid-19.
In a statement issued to The Irish Times, Jonathan Ward, Mothercare Ireland’s managing director, said: “When Covid-19 began to spread in Ireland no one knew the scale of the impact that this would have. I think it’s also fair to say that three months on we are still unsure as to the extent and the duration that Covid-19 will be a factor in our lives.
“The impact on our business to date is unprecedented and what has become clear over the recent weeks is that store sales are going to continue to be seriously impacted in the short term whilst social distancing measures are in place and longer term as consumer habits permanently change.”
The Irish company was also hit by the collapse late last year of Mothercare in the UK, with certain stock being sourced through that British business.
“We had already experienced issues with our supply chain in 2020 and when we factor the Covid-19 impact on top of this we are forecasting substantial losses this year alone. Unfortunately, our business is now no longer sustainable as it will continue to make losses into the future,” said Mr Ward, whose father David founded the Irish business.
“As a family business, it is devastating news. Whilst we’ve tried to keep our teams as up to date as possible through these challenging times, it’s still a huge shock. I’d like to personally thank all our loyal management and staff for their dedication and service to our customers over the years.”
Mothercare’s UK business was placed into administration last November, with all of its 79 stores closing and more than 2,800 jobs lost after its domestic operations buckled under the weight of the pressures plaguing the retail sector. At the time, the company said it planned to focus on its overseas franchising operation.