Returning Mothercare boss takes 20% pay cut to lead ailing firm's turnaround

Mothercare (Other OTC: MHCRF - news) boss Mark Newton-Jones is taking a pay cut after being re-hired to turn around the struggling retailer's fortunes just over a month after being ousted.

Details of the reappointment of Mr Newton-Jones as chief executive were confirmed a day after the move was first announced as part of a shake-up which will see 50 stores axed and 800 jobs go.

He will be paid a basic salary of £480,000 to lead the turnaround of the group, compared to £612,000 received in the year to March 2017, which was part of a total package including pension and benefits worth £814,000.

A Mothercare spokesman said: "In recognition of Mothercare's financial position and the support for the restructuring and refinancing given by multiple stakeholders, Mark has taken a significant pay cut."

It is the latest twist in the boardroom drama at the retailer, which saw Mr Newton-Jones leave on 4 April to be replaced by former Tesco (Frankfurt: 852647 - news) executive David Wood - on a basic salary of £430,000.

The saga took a new turn later in April after the retirement of chairman Alan Parker - whose replacement Clive Whiley was instrumental in pulling together a new financing package for the beleaguered company and deciding to reinstate Mr Newton-Jones.

Mr Wood will stay on as managing director on the same salary as he was earning as chief executive.

Mothercare on Thursday set out plans for a company voluntary arrangement (CVA) to accelerate its ongoing store closure programme.

It will seek agreement from creditors to shut 50 loss-making stores and slash rents at 21 others under the rescue plan, which is similar to those pursued by others such as Carpetright (Other OTC: CGHXF - news) and New Look.

The company, which dates back to 1961, said it was facing a "perilous financial condition" and reported a £72.8m loss for the year to 24 March.

Mothercare's restructuring would see it shrink from 137 UK stores currently to 73 by 2022 - down from a network of more than 400 in 2017.

The company employs around 5,000 people, most of them in Britain. It has more than 1,000 stores overseas, largely operated through franchises.