A High Court judge has confirmed the appointment of an examiner to Mothercare Ireland, which employs 276 people in 18 stores across the State.
Mr Justice Brian McGovern confirmed Declan McDonald, of PricewaterhouseCoopers, after hearing an independent expert believed the company has a reasonable prospect of survival once certain conditions are met. The court was told attempts will have to be made to renegotiate shop leases as part of a restructuring plan.
Last week, the judge granted an application by Rossa Fanning BL, for Mothercare Ireland, for court protection and the appointment of Mr McDonald as interim examiner.
Mothercare Ireland is a franchise of Mothercare UK and has traded here for 23 years.
It is Ireland’s largest maternity, baby, nursery retailer.
Last week the judge said he was satisfied the company, and two related companies, Mothercare World and Effleby Trading Ltd, were entitled to protection.
The company is to trade as usual during the examinership process; staff and suppliers will be paid as normal and all gift cards and family card points will be honoured.
A significant source of the company’s difficulties, the court previously heard, arose from having to contend with rents that significantly exceed current market rents.
The company says the renegotiation and repudiation of rents will be a significant aspect of the examinership process.
Mr Fanning said the UK company is economically totally separate to the Irish company and is a supplier.
He said the UK parent company wants to be paid €2 million for goods supplied and that figure related to the supply of normal stock.
He said Mothercare Ireland grew very rapidly in the boom. It had four stores in 1993 and in 2011 that had increased to 24 stores.
While the business had been affected by the downturn, it is still a €33 million a year trading business, he said.
Counsel said there were numerous reasons for the company’s insolvency including the fact that its target audience is young families who have been particularly hit by the recession with a consequent fall in spending from that group.
The company was also affected by discount stores selling baby and maternity wear.
High rents were a major factor and leases with high rents were entered into mainly with upward-only rent increase clauses at the height of the boom, he said.
