Mothercare to slash costs after £103m loss
The new chief executive of Mothercare has vowed to be "ruthless" in cutting its UK costs, competing aggressively on price and driving online growth to turn around the domestic operation.
Simon Calver, who joined the maternity retailer in April from the DVD rental firm Lovefilm, aims to restore the UK business to "acceptable levels of profitability" in three years by cutting costs by £20m.
Mothercare posted a full-year loss of £102.9m, following hefty non-cash writedowns on the value of its Early Learning Centre business and property restructuring charges. The retailer has 1,339 shops in 59 countries, including 311 in the UK. It has "suspended" its dividend until the plans deliver a "marked improvement" in results.
Its UK business posted a loss of £24.7m over the 53 weeks to 31 March, due to a 6.2 per cent fall in underlying sales and tumbling margins. The international business grew operating profits by 27 per cent to £34.9m and sales rose by 22.4 per cent to £252.7m. Mr Calver said that in developing markets "we are going to be putting our foot to the floor to accelerate our growth as much as we can".
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