Mothercare launches £100m rights issue to fund closures and revamp stores

23rd Sep 2014 09:45

British baby goods retailer Mothercare has launched a £100m rights issue in a bid to raise capital to fund more store closures and refurbish some of its outlets.The firm's overseas business remains solid but strong competitions from the likes of Tesco and Amazon has left Mothercare's British business in a precarious position, with the company needing to close some of its stores as well as growing online.The firm aims to spend £25m of the proceedings on closing stores, with the number of outlets expected to fall to about 200 by the end of the year compared to 311 stores in 2012. Meanwhile, an additional £20m would be invested on revamping other outlets with the remainder being utilised to improve IT infrastructure and reducing debt."By modernising and transforming the UK into a digitally-led business supported by a modern store estate we will underpin the growth of the group's successful International business," said group chief executive Mark Newton-Jones.Mothercare said the fully underwritten rights issue would be set at 125p per share, a 49% discount on Monday's closing price of 248.25p.Mothercare shares were down 9.37% to 225p at 09:55 on Tuesday.