Mothercare renegotiates bank loan terms after profit warnings

Mothercare has 220 stores under the Mothercare and Early Learning Centre brands. Photograph: Paul Faith/PA

Mothercare is renegotiating the terms of its bank loans just seven months after it secured a £90m refinancing facility. A weekend report said that the embattled baby care retailer had asked lenders HSBC andBarclays for breathing space.

It comes after a number of profit warnings and the departure of chief executive Simon Calver in February.

A source close to Mothercare said the talks were "part of a prudent approach" about giving it the flexibility to fund investment as it opens new stores and carries out refits. Elsewhere in the business, loss-making stores are continuing to close as planned.

It emerged at the weekend that the company was squeezing suppliers by adding a 2.5% charge on all invoices and telling them it would extend its payment time for bills to 90 days.

Last month, the group revealed a more resilient UK sales performance so far this year.

The retailer, which has 220 stores under the Mothercare and Early Learning Centre brands, said like-for-like sales were just 0.3% lower in the 12 weeks to 29 March, against a 1.9% fall for the whole financial year.

Chairman Alan Parker described the performance as encouraging after the profit warning issued in the wake of poor Christmas trading. There was also improved underlying trading at its international business.

The UK business, which made a loss of £21.7m during the 2013 financial year, has been hampered by price wars in home and travel goods.

A Mothercare spokeswoman declined to comment.