Mothercare UK DB pensions safeguarded

Mothercare UK (MUK) has announced that its two defined benefit pension schemes and their members have been safeguarded following the company's fall into administration.

The schemes will be moved from MUK and assigned to a subsidiary of the company and new legal entity, Mothercare Global Brand (MGB).

MUK reached an agreement with its administrators, PwC, to assign the brand and re-contract “the majority” of the firm's international franchise agreements to MGB, including all liabilities in respect to MUK's DB schemes.

The company calculated the value of its pension liabilities at £11.2m, as of 12 October 2019.

Commenting on the announcement, Mothercare plc CEO, Mark Newton-Jones, said: "This has been an extraordinarily challenging period in Mothercare's 58-year history, particularly for our committed, hard-working colleagues who have worked tirelessly to sustain our UK retail operation.

"It was simply not financially viable to maintain the UK store estate and supporting infrastructure any longer without putting the whole Mothercare Group at risk.

"Whilst this was a very difficult decision and one we didn't take lightly, it completes the transformation of our group into a capital light, cash generative and profitable business and, importantly, protects all of the pensioners of the group."

"We are confident in the future of the Mothercare brand. We believe that, without the financial and management burden of running a UK retail operation, we can singularly focus Mothercare on its global international franchise.

The firm also announced that non-executive director, Nick Wharton, will be stepping down and replaced by Brian Small.

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