Mothercare is latest big-name retailer to enter examinership
Mothercare has become the latest big-name retailer to go into examinership as efforts are made to protect 276 jobs in 18 stores.
The aim of seeking court protection and examinership is to achieve a restructuring of the company, save as many jobs as possible and minimise store closures, the company said.
It is Ireland's largest maternity, baby, nursery and children's clothes retailer. However, the company has said it cannot afford to support unprofitable stores.
A significant source of the company's difficulties is having to contend with rents that significantly exceed current market rents, the court was told.
The company said the renegotiation and repudiation of rents would be a significant aspect of the examinership process.
The Mothercare examinership came one day after an examiner was appointed to a company operating 13 Best Menswear stores across Ireland and two other fashion stores, employing some 130 people.
Mothercare has said it will trade as normal during the examinership process. Staff and suppliers will be paid as normal and all gift cards and family card points will be honoured.
Mothercare Ireland is a franchise of Mothercare UK and has traded here for 23 years.
Mr Justice Brian McGovern granted an application by Rossa Fanning BL, for Mothercare Ireland, for court protection and the appointment of Declan McDonald of PriceWaterhouseCooper as interim examiner.
The judge said he was satisfied the company and two related companies, Mothercare World and Effleby Trading Ltd, were entitled to protection and the appointment of an interim examiner.
He made directions for advertising the petition and returned it for hearing on July 30.
Mr Fanning said Mothercare Ireland grew very rapidly in the boom. It had four stores in 1993 and in 2011 that had increased to 24. While the business had been affected by the downturn, it was still a €33m a year trading business with 276 employees, he said.
Counsel said there were numerous reasons for the company's insolvency, including that its target audience is young families who have been particularly hit by the recession.
The company was also affected by discount stores selling baby and maternity wear.
High rents were a major factor, he stressed.
The business group ISME pointed to the two examinerships of well-known retailers as a strong argument against the "nonsensical" decision to increase the minimum wage by 50c an hour.
Retail Excellence Ireland (REI) said upward-only rents remained a significant issue for many Irish retailers.
Its CEO David Fitzsimons said: "It is a fact that many landlords are seeking to impose Celtic tiger rents on struggling retailers. The domestic economy remains in a fragile state and these rents are simply untenable."