Mothercare is to close a third of its stores and slash hundreds of jobs in a brutal overhaul.
On another grim day for the High Street, the babywear retailer won support for a rescue that will shut 50 shops and put 800 jobs at risk.
The move came as the future of department store chain House of Fraser hung in the balance.
The problems at two of Britain’s best-known retailers underlined the crisis engulfing the High Street amid an onslaught from online rivals.
Closures: Babywear retailer Mothercare has won support for a rescue that will shut 50 shops and put 800 jobs at risk
More than 10,000 shops overall are set to disappear this year – the most in a decade – according to a bleak report published by Centre For Retail Research.
Toys R Us and Maplin have gone bust this year, while Marks & Spencer, New Look and Carpetright are closing stores.
Retail expert Richard Hyman warned the ‘bloodbath’ was set to continue. He said: ‘We are going to see a lot more store closures, and that will sadly mean more people will lose their jobs.’
Mothercare yesterday received the backing of creditors for its company voluntary arrangement (CVA) rescue plan.
Embattled retailers are increasingly turning to the agreements to stave off collapse as they face competition from online rivals.
Mothercare will close 50 of its 137 stores as part of the deal.
Clive Whiley, interim executive chairman, said the overhaul was crucial to turn around its fortunes. ‘These measures provide a solid platform from which to reposition the group and begin to focus on growth, both in the UK and internationally,’ he said.
House of Fraser is still scrambling to secure its own agreement. The 169-year-old business is thought to be locked in crisis talks with banks and landlords this weekend over its proposals to shut a third of its stores and cut its rent payments.
Failure to strike an agreement would put the jobs of 17,000 staff and 59 shops at risk, as well as £70million pledged by a new investor, which is conditional on a deal being done. Yesterday there were claims that negotiations had hit a stumbling block.
Bosses were said to be holding urgent discussions with HSBC and the Industrial and Commercial Bank of China, which are concerned about the cash pledge by Hamleys owner C Banner.
They are reportedly demanding assurances that C Banner will follow through on its promise of funding when it takes a majority stake in House of Fraser.
The CVA also requires the approval of landlords but they are said to not be supportive.
House of Fraser needs 70 per cent of its creditors to back its plan and has been seeking the approval of the Pensions Regulator. About 20 of its 59 stores could close if the CVA goes ahead.
A spokesman for House of Fraser dismissed reports of closures as speculation. And he refused to comment on discussions with creditors, adding: ‘Constructive engagement continues between all parties.’
Any closures would come on top of a slew of the recent announcements by retailers such as Debenhams, Marks & Spencer and Carpetright. The Centre For Retail Research said the dramatic growth in online shopping is one of the biggest reasons for the High Street’s decline.