Mothercare to close 111 more stores
Thursday 12 April 2012
Struggling retailer Mothercare today said it will close another 111 UK stores over the next three years in a move impacting 730 jobs.
The mothers-to-be, babies and children's group revealed plans to cut the number of stores in the UK from 311 to 200, which will include 36Mothercare sites and 75 Early Learning Centres, following months of weak trade.
The announcement came as the group revealed a further deterioration in UK like-for-like sales, which fell 9.5% in the 12 weeks to March 31, compared with 3% in the previous quarter.
Alan Parker, executive chairman, said the changes will see the group transformed into a "lean, more competitive business".
He added: "Mothercare is a great global brand with strong international partners. Today marks the beginning of a three-year turnaround and I am confident we will deliver a sustained recovery and long-term success."
Mothercare said as part of its cost-reduction programme it would slash UK head office payroll costs by up to 16%, which will equate to around 90 roles.
The remaining 200 stores will be "profitable", the group said, and will comprise 95 out-of-town sites and 105 high street locations, while the closures will improve UK profits by £13 million by March 2015.
Mothercare has already closed 62 stores in the current financial year, three Mothercare outlets and 59 Early Learning Centres.
The group secured a refinancing deal with its banks HSBC and Barclays to fund the store reduction programme, increasing lending from £80 million to £90 million.
While the group has suffered at home, it is being propped up by a strong performance overseas, where it has 1,000 stores, with international sales growing 18% in the fourth quarter.
As part of the transformation strategy unveiled today, Mothercare pledged to accelerate its international expansion.
The update comes weeks before Simon Calver, the former boss of internet movie rental company Lovefilm, becomes chief executive in an appointment that has signalled the parenting group's drive to boost its online presence.
The group today said it will launch combined online and in-store customer options with its new UK website, which is on track for launch in the first half of the next financial year, as well as 30 new overseas websites.
Mothercare shares, which have fallen around 60% in the last 12 months, added 4% to their value after today's announcement.
Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said: "While the road ahead still looks difficult, Mothercare's fightback looks to have begun, with consensus opinion potentially thawing from an out and out sell."
David Jeary, an analyst at Investec, said the changes were "all in all, sensible and needed" but further detail was required from the full-year results later in the year.
Diving in at the deep end is no excuse for shirking the style stakes
- 2 Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
- 3 Why I'm on the brink of burning my Israeli passport
- 4 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 The true Gaza back-story that the Israelis aren’t telling this week
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Loom bands: Bids for dress made from colourful rubber pass £170,000 on eBay
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Tommy Ramone dies: Last surviving founder and drummer seminal punk band The Ramones dies aged 62
Gaza-Israel conflict: The terrible price Palestinian children are paying for Israel’s war with Hamas
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...