09 November 2019 00:40
// Mamas & Papas falls into administration less than week after rival Mothercare did the same // However, Mamas & Papas's assets were re-acquired by Bluegem Capital in a pre-pack administration deal // The deal sees 73 job cuts and six store closures, with another 54 head office jobs now at risk Mamas & Papas has announced store closures and job cuts after it was sold in a pre-pack administration deal less than a week after main rival Mothercare entered administration. The move sees Mamas & Papas shut down six stores and make 73 staff members redundant with immediate effect, while another 54 head office jobs remain at risk. Private equity firm Bluegem Capital, which has owned the retailer since 2014, has regained control after it bought back Mamas & Papas' assets via a pre-pack administration deal. READ MORE: The pre-pack deal enables Bluegem to cut some of the retailer's financial liabilities, including six loss-making stores in Aberdeen, Preston, Milton Keynes, Lincoln, Leamington and Fareham. Mamas & Papas said 21 stores remain open but it will continue to review its Huddersfield head office operations.
"These actions are always difficult but they are also necessary in a challenging market to ensure Mamas & Papas achieves its considerable future potential," Mamas & Papas chairman Riccardo Cincotta said. "We remain fully focused on maintaining our position as the UK's most popular nursery brand. "We will continue to review our store portfolio in the light of customers' changing behaviour and we remain fully committed to an omni-channel offering that reflects their evolving needs." The news comes after Mamas & Papas in September appointed advisers from Deloitte to review options for the business as it struggled to remain profitable. Deloitte had also handled a CVA for the retailer in 2014, resulting in Mamas & Papas closing down half of its store estate. BlueGem reportedly invested £20 million into Mamas & Papas when it bought the retailer in 2014. For the year ended April 2018, Mamas & Papas revealed a second consecutive year of full-year losses after sales plunged to £8.2 million, down from £10.3 million a year earlier. Mamas & Papas' pre-pack administration occurred the same week as the collapse of its main rival, Mothercare. Administrators from PwC were appointed on Tuesday to close down Mothercare's UK retail operations and business services arm, resulting in the loss of around 2800 jobs and 79 store closures within the next few months. Mothercare launched a closing down sale today with nearly all products "dramatically reduced", in a bid to speed up its administration process. Click here to sign up to Retail Gazette's free daily email newsletter