June 1 (Reuters) - Struggling British mother and baby products retailer Mothercare said its creditors approved its proposal to close over a third of its UK stores as part of a survival plan.
Shares of Mothercare were up 7.1 percent at 1355 GMT.
Mothercare said it secured creditor approval for so-called company voluntary arrangement (CVA) proposals that would enable it to shut 50 stores and secure rent reductions on 21 others. As many as 800 jobs could be lost.
The chain has rehired Chief Executive Mark Newton-Jones, who was sacked eight weeks ago, on a lower salary.
The firm’s sales and profit have been hammered by intense competition from supermarket groups and online retailers in its main UK market as well as by rising costs, resulting in what the company called “a perilous financial condition.”
The CVA route, which allows firms to avoid insolvency or administration, has already been taken this year by fellow UK retail strugglers - fashion chain New Look, floor coverings group Carpetright and department store group House of Fraser.
The company, which was founded in 1849, has stores in 59 locations across Britain and Ireland, including a flagship shop on London’s Oxford Street. (Reporting By Justin George Varghese in Bengaluru; Editing by Adrian Croft)