The baby and toddler chain is in rescue talks with its banks as profits nosedive and debts rise. Despite shares crashing by more than 15% on Friday (March 2) bosses claim a plan to fight back is on track.
Mothercare's debts have increased from nearly £38 million to just under £50 million as it continues to be hit by cheap competition from supermarkets and online retailers, the Mirror reports .
Mothercare has already halved its UK store number to 140 and aims to close up to another 60.
The retailer warned on Thursday (March 1) profits for the year to March would be towards the bottom end of a range of £1 million to £5 million, down from nearly £20 million the previous year.
It revealed it is likely to break borrowing limits set by its banks and is looking for new sources of finance.
Chief executive Mark Newton-Jones said: "The retail sector continues to face a number of pressures that are clearly having a profound impact on the sector as a whole."
He added: "The support already being shown gives us confidence that, despite the challenges, there remains a clear way forward for Mothercare to realise its ambition to be the leading global retailer for parents and young children."
The news comes at the end of a torrid week for the high street.
Toys R Us and Maplin entered administration on Wednesday (February 28), threatening 5,700 jobs while Prezzo published proposals to close 94 restaurants, putting 1,000 roles at risk.
Flooring chain Carpetright is in talks with its banks after issuing its third profit warning in four months and will examine a "range of options" to strengthen its balance sheet.