Mothercare docks returning boss’s pay ahead of store closures
Mark Newton-Jones was sacked as chief executive in April, but has been re-hired in a dramatic turnaround.
Mothercare has docked the pay of chief executive Mark Newton-Jones as he returns to lead a turnaround of the ailing babywear retailer.
The company, which employs around 3,000 people across 137 stores, ousted him as boss in April.
However, on Thursday it said he would be going back to head up the firm as it undertakes a sweeping store closure plan, which could see the loss of 800 jobs.
Mr Newton-Jones will be paid £480,000 on his return, having received a basic salary of £612,000 prior to his departure.
A spokesman for the group said: “In recognition of Mothercare’s financial position and the support for the restructuring and refinancing given by multiple stakeholders, Mark has taken a significant pay cut.
“Mark has a major role as part of the team to return to Mothercare to a more stable footing, accelerate the transformation of the Group and drive it towards a viable and sustainable future.”
Mothercare has proposed to close 50 stores as part of a Company Voluntary Agreement (CVA), an insolvency procedure that requires the approval of landlords.
Alongside the restructuring, Mothercare also announced a refinancing package worth up to £113.5 million.
It comprises £28 million through an equity capital-raising, an extension of its existing debt to £67.5 million, and £18 million in shareholder and trade partner loans.
Among the latter figure is a £2 million loan from DC Thomson, publisher of the Beano.
Dan Wood, who was brought in to take over from Mr Newton Jones, will now be made managing director.
Mothercare also posted its annual results on Thursday, revealing that it swung to a £72.8 million pre-tax loss in the year to March 24, compared with a £7.1 million profit in 2017.
On an adjusted basis, pre-tax profits fell 88.3% to just £2.3 million.
In the UK, losses grew from £9.7 million to £79.4 million.