Mothercare in talks over loan terms

Ealing Times: Retailer Mothercare is renegotiating the terms of its bank loans Retailer Mothercare is renegotiating the terms of its bank loans

Mothercare is renegotiating the terms of its bank loans just seven months after it secured a £90 million refinancing facility.

The Sunday Times said that the embattled baby care retailer had asked lenders HSBC and Barclays for breathing space.

It comes after a number of profit warnings and the departure of chief executive Simon Calver in February.

A source close to Mothercare said the talks were "part of a prudent approach" about giving it the flexibility to fund investment as it opens new stores and carries out trial re-fits. Elsewhere in the business, loss-making stores are continuing to close as planned.

Meanwhile, it emerged over the weekend that the company was putting the squeeze on suppliers by adding a 2.5% charge on all invoices and told them it would extend its payment time for bills to 90 days.

Last month, the group lifted some of the gloom surrounding Mothercare by revealing a more resilient UK sales performance so far this year.

The retailer, which has 220 stores under the Mothercare and Early Learning Centre brands, said like-for-like sales were just 0.3% lower in the 12 weeks to March 29, against a 1.9% fall for the whole financial year.

Chairman Alan Parker described the performance as encouraging following the profits warning issued in the wake of poor Christmas trading. There was also improved underlying trading at its international business.

The UK business, which made a loss of £21.7 million during the 2013 financial year, has been hampered by price wars in home and travel goods.

A Mothercare spokeswoman declined to comment.

Mothercare publishes annual results later this month. Analysts expect pre-tax profits of around £8 million.

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