Mothercare says gift vouchers and warranties still valid

Mothercare Ireland has reassured its customers that gift vouchers and product warranties are under no threat following the announcement it was entering interim examinership and that it is "business as usual" from a consumer perspective.

Rental rates are at the core of the company’s difficulties and, while the objective is to minimise store closures, its current and future relationship with customers remains unchanged.

In a statement, the company said it will trade as normal during the examinership process and “wants to assure all customers that it will continue to honour all gift cards and family card points”.

All employees at the family-owned franchise have been paid to date as have suppliers, it said.

“Mothercare offers a two-year warranty on all of its products and this won’t affect customers,” a spokeswoman said.

“The last thing we want is for customers to think there is any issue over gift cards. It’s very much business as usual and staff and stores will look after them.

“It’s an Irish family-run business and we would be really eager for people to continue to shop in Mothercare Ireland.”

The company moved to emphasise this message through its Facebook page and received messages of support.

Many of its products in nursery, travel and fashion lines are sourced directly from its master franchise supplier in Europe and the spokeswoman said it continued to have a very good relationship with other major suppliers like Dorel and Britax. All products remain covered by warranty.

The company has said the restructuring process was tasked with saving jobs (it has 275 employees) and minimising store closures, which are threatened by rent levels.

“Many of its 18 stores across the State have to contend with rents that significantly exceed the current market rents. The repudiation and renegotiation of leases will be an essential part of the examinership process,” the company said.

In response to the move on Wednesday, Retail Excellence Ireland said the issue of “upward only rents” remains a significant challenge for retailers.

Chief executive David Fitzsimons said: "It is a fact that many landlords are seeking to impose Celtic Tiger rents on struggling retailers. The domestic economy remains in a fragile state and these rents are simply untenable."

Between 2000 and 2007, commercial rents increased by 240 per cent, he said, while over the same period consumer prices increased by 30 per cent.

“We implore landlords to charge rents which reflect market conditions. If landlords do not take a common sense approach, more retailers will fail,” he said.