(Bloomberg) -- Mothercare Plc Chief Executive Officer Mark Newton-Jones proposed taking the struggling retailer private before his departure in April, according to people familiar with the matter.
Newton-Jones is said to have proposed a management buyout to the board of the baby-goods retailer. The option was one of a number of proposals considered and wasn’t pursued further, the people said. The shares fell as much as 14 percent.
Mothercare has had a tumultuous few months. Newton-Jones was ousted by Chairman Alan Parker in April, who himself departed just weeks later. Newton-Jones was then rehired as CEO this month by Parker’s successor, with a salary cut of 22 percent.
“As you would expect, at certain points the board considers various strategic options available to the company,” Mothercare said in an emailed statement. “However, no specific plans were drawn up in relation to an MBO. The business is focused on implementing the comprehensive measures announced last week to provide a renewed and stable financial structure for the business and to drive a step change in Mothercare’s transformation.”
After a dismal holiday season, Mothercare arranged a package to raise as much as 114 million pounds ($152.1 million) by selling debt and shares. The retailer also plans to close 50 stores and lower rents at 21 other locations.
Mothercare has lost share to online rivals and grocery chains in recent years. That’s been compounded by a squeeze on Britons’ disposable incomes and a sharp increase in sourcing and staffing costs.
Mothercare shares were down 12.7 percent as of 4:10 p.m. in London, extending this year’s drop to 50 percent.
©2018 Bloomberg L.P.
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