The restructuring of Mothercare hit a snag yesterday when it emerged that creditors in one of its trading companies had not backed its proposed company voluntary arrangement.
The maternity and babywear retailer disclosed that a “rigorous post-meeting review of the voting documentation” by KPMG had revealed that creditors in Children’s World had failed to back the CVA, an insolvency process that allows retailers to close shops and cut rents at landlords’ expense.
Only 73.3% of the creditors in Children’s World, which holds 21 of Mothercare’s 137 stores, backed the CVA, instead of the required 75%, with some incorrectly filling in their voting forms.
The retailer said it was considering all options for the 21 Children’s World stores including shutting the outlets, according to the Guardian,
The Telegraph added that this would see the retailer to axe an extra 300 staff after it was revealed that creditors had blocked part of its restructuring plan following a recount of the votes.
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