Troubled Huddersfield nursery goods firm Mamas & Papas has been thrown a lifeline by its creditors.
The company – which last month announced it is to axe between 50 and 90 jobs at its Colnebridge headquarters – has done a deal with creditors on proposals to safeguard the future of its UK retail arm.
Creditors, including the landlords of its 60 UK stores, voted overwhelmingly yesterday to back a Company Voluntary Arrangement (CVA) at a meeting in London –a move which will allow the firm to cut its rent bill.
The CVA, which was overseen by accountancy firm Deloitte, relates to Mamas & Papas (Retail) Ltd, the company which operates Mamas & Papas’ UK stores – where it has 956 employees.
Other companies in the group are unaffected.
Mamas & Papas will now continue its “constructive dialogue” with landlords to implement the CVA proposals, which include plans to reduce rent on certain stores in the UK retail business.
Mamas & Papas chairman David Scacchetti said: “This is an important milestone for us. The proposals agreed today not only enable us to cut costs and ensure a profitable retail portfolio, but will also create a platform to allow us to continue offering innovative, premium products to customers in the UK and internationally, both in stores and online.”
He added: “I would also like to take this opportunity to thank our creditors for their support during this difficult time. Alongside the recent investment from BlueGem, the strengthened leadership team and the support of our colleagues, we are confident we are taking the steps necessary to protect the Mamas & Papas brand and help it to achieve its future potential.”
Daniel Butters, partner at Deloitte, said: “The vote in favour of the CVA enables Mamas & Papas to revise lease terms and proceed with its wider restructuring plan – benefiting creditors, members, employees, suppliers and trade partners alike.
“In addition to securing votes from over 75% of all creditors, for a CVA to be approved a company also needs the support of over 50% of unconnected creditors, of which landlords are the largest group for Mamas & Papas”.
Agreement on the CVA follows the announcement last month that Mamas & Papas is to axe between 50 and 90 posts from the 440-strong workforce at Colnebridge as part of efforts to cut costs in the face of tough trading conditions.
At the time, Mr Scacchetti said the award-winning firm’s wholesale and international businesses were performing strongly, but the UK retail environment was the toughest he had seen in the 30 years since the company was founded.
UK store staff are not included in the redundancy process taking place at Huddersfield and the stores are open and trading as normal.
Mamas & Papas was formed in 1981 by husband and wife David And Luisa Scacchetti to provide premium nursery products such as pushchairs, cots and bedding. Celebrity mothers using Mamas & Papas brands have included Gwen Stefani, Emma Bunton and Alicia Keys.
Along with its 60 UK stores, Mamas & Papas has outlets in about 60 countries, including Russia, China and the Middle East.