Business
Update on transformation and disposal of ELC
Update on transformation and disposal of ELC.
About this update from Mothercare Plc
[{"type":"text","content":"\n \nRNS Number : 5686S Mothercare PLC 12 March 2019 \n\nTHIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED IN EU REGULATION NO 596/2014 AND IS MADE IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF THAT REGULATION\n \nMothercare plc \nUpdate on transformation and disposal of Early Learning Centre\nFollowing the refinancing and restructuring of Mothercare plc (\"Mothercare\" or the \"Company\" and together with its subsidiaries, the \"Group\") announced in May 2018, Mothercare remains on track with the Group's transformation plan:\n· The UK store closure program, which will result in a total estate of 80 stores by the end of March 2019, is ahead of the original schedule and brings the Group down from 137 stores in May 2018; \n· the product outsourcing initiative is underway which will begin to yield margin benefits from Autumn/Winter 2019;\n· the creation of a leaner organisational structure, which led to a collective consultation exercise with all employees at Head Office, was completed in December 2018; and\n· the Company is on track to deliver cost savings of at least £19 million per annum in aggregate.\nThe revised Group structure has been designed to drive a greater focus towards strengthening its global brand, with improved product design, marketing and distribution of Mothercare products around the world. At the same time the UK management team is now singularly focused upon operating with the discipline of a typical franchise partner, with the objective of bringing the UK business back towards profitability. \nThroughout the last nine months we have been progressively reducing net debt, and our aspiration remains to be bank debt free by the end of 2019. This objective has been greatly assisted by the sale and leaseback of the UK head office for a cash consideration of £14.5 million, which completed in December 2018.\nIn addition, we are today announcing the next step towards being free of bank debt, with the proposed disposal of the business and certain assets of Early Learning Centre Limited (\"ELC\") to TEAL Brands ...