Mothercare has seen sales and profit hammered by rising costs and intense competition from supermarket groups and online retailers in its main UK market.
The mother and baby products retailer said on Monday that it had been working on a comprehensive restructuring and refinancing package.
The company will disclose details of the restructuring plan along with full year earnings on Thursday, the source said.
Mothercare declined to comment.
Newton-Jones stepped down as CEO in April, a month after Mothercare warned on full-year profit.
Shares in Mothercare, a popular British high street name, have lost more than two-thirds of their value this year and closed at 21.30 pence on Wednesday.
The British Retail Consortium (BRC) said last week that the retail market was likely to remain "extremely challenging".
Looking at retail sales over the three months to April, the BRC said overall spending was up 0.4 percent year-on-year, marking the third-worst reading since the global financial crisis.
Already this year Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality have moved into administration, while fashion retailer New Look and floor coverings retailer Carpetright are closing stores.
Sky News reported Mothercare's plans earlier and said the store closures would trigger hundreds of job cuts.
(Reporting by Ismail Shakil in Bengaluru)
By Ismail Shakil