P.S. I'm writing before the actual event happens.
Will Mothercare meet the same fate as Woolworths?
You might have paid attention to the fall of Mothercare share price and the uncertainties surrounding their business. But, what you didn’t know is they’ve been in and out of intensive care for the past twenty years!
Did you know Mothercare was once valued over £2bn?
That was in the last century in the mid-90s. Back then, things were on the up and up! And Mothercare market value exceeded sales 1.5 times when sales during that period were twice as much as today!
And speaking of today, Mothercare valuation resembles that of a rundown council that been neglected for years.
The market is valuing Mothercare 25 times less than it was during their heydays.
Surely, there is no way back for Mothercare
Given the dire conditions of Mothercare, we can safely say there’s no way back.
Seriously, if you are betting on the fate of Mothercare, there is less than 3% chance it would survive as an entity. But we can never discount the stupidity of others. There are far too many acquisitions story that surprised market in the past, such as HP buying Autonomy, Sony buying Columbia Pictures, News Corp buying MySpace and the infamous Slater and Gordon buying Quindell.
These were the lucky shareholders.
But…
The historical decline of Mothercare and the numerous false promises by the company over the years means a buyer is better off waiting for the administrators to come in FIRST, then engage in buying pieces of the businesses at a massive discount and without the liabilities.
P.S. The Mothercare brand is up for grabs, but buyers don’t like the current business structure and the increasing liabilities attached!
Here are 12 reasons why NOBODY is going to SAVE Mothercare PLC:
1). Loss of reputation; - Reputation is VERY IMPORTANT in business. If you were to promise something YOU WOULD DELIVER, if not, then people will abandon your PROMISES and believe you are a LIAR!
Mothercare’s reputation was on the line when it did a did a 9-for-10 rights issue will be issued at 125p per share in 2014. The price was 34% discount to their current share price (at the time) to raise £95m…
