Mothercare Australia collapses into administration
Mothercare said that Mothercare Australia has been placed into administration after attempts to sell the business in the face of falling sales failed.
The UK company had already booked a £10.6m provision to write off its remaining investment in Mothercare Australia, which accounted for 7pc, or around £50m a year, of its international sales.
The British business owned 23pc of Mothercare Australia and a spokesman said it was “not appropriate” for it to comment further on the administration.
Sanjay Vidyarthi, analyst at Espirito Santo, said the Australian joint-venture was “loss-making”, adding: “Mothercare is not guiding to any material change in international profit guidance, suggesting that the franchise income was minimal.”
Shares in Mothercare fell by 3, or 1pc, to 326p.
The retailer, which owns Early Learning Centre, is also battling challenging conditions on UK high streets and reported a 5.9pc fall in like-for-like sales for the run-up to Christmas.
It emerged on Wednesday that Mike Logue, Mothercare’s UK boss, has been made redundant.
It is understood that Simon Calver, the former boss of LoveFilm who joined Mothercare as chief executive last year, wants to take direct control of the UK business and has clashed with Mr Logue in recent months.
Mr Logue had only worked for Mothercare for 18 months. He previously ran Asda’s homewear business Asda Living and video games retailer Gamestation.
Mothercare said the departure of Mr Logue was due to a “restructuring of senior management”.