New chief's vow to revive Mothercare
Toddler bonding, ultrasounds and coffee breaks point the way ahead for maternity retail giant
It boasts children's dance classes, an indoor lawn and an ultrasound baby scanning studio. No, it's not a modern crèche or maternity ward. This is the blueprint for luring yummy mummies back to Mothercare, the ailing maternity retailer.
Simon Calver, the new boss drafted in to save the chain, thinks he knows what makes mothers tick. After all, his own wife is expecting their second baby before Christmas.
In an exclusive look at its newly refurbished store in north London, he unveiled the chain's first in-store Costa Coffee, a "buggy park" for road-testing of prams, life-sized Happyland toys, and a "mumspace" to allow parents to bond with their toddlers, including weekly "diddly dance" sessions.
The store also boasts Mothercare's second ultra-sound facility, which offers a 4D scan for up to £179, and staff using Apple iPads to show product demonstrations, check stock availability and order products for customers.
Mr Calver – who joined Mothercare in late April from Lovefilm, the DVD rental firm owned by Amazon – said: "We will begin to roll out what is successful to the rest of the estate," although he declined to provide a timeframe.
But he has a mountain to climb, as Mothercare suffered group losses of £102.9m over 53 weeks to 31 March, dragged down by hefty non-cash writedowns on the value of its Early Learning Centre business and property restructuring charges.
Peter Smedley, an analyst at Charles Stanley, said: "Mr Calver is very conscious this is a multi-year turnaround task, given the plethora of problems, which have been both self-inflicted and the result of competitor action."
While Mothercare's previous management team rapidly expanded its profitable international business to more than 1,000 stores, they took their eye off product availability, pricing and customer service in the UK, to the delight of John Lewis and the big grocers. Mr Calver has already said it will take three years to restore the UK business to profitability, as it seeks to eliminate £13m of losses by reducing its store numbers from 311 to 200 by March 2015.
It also plans to slash its "non-store overhead costs" by £20m. Mr Calver, whose has an 11-month old boy, said: "We are not basing the turnaround of the UK on huge like-for-like growth, huge top line revenue and huge margin improvement." Its UK business posted a loss of £24.7m in 2011-12 after sales and margins tumbled.
Mothercare's 30,000sqft store in Edmonton is the first iteration of Calver's plan to get its tills ringing again. In terms of retailing basics, Mr Calver said it already had made progress in improving product availability and re-establishing its reputation for value with T-shirts for £2.50, as well as improving its premium offer with the launch of a designer range from Jools Oliver, the wife of the celebrity chef Jamie, on 17 August.
Alan Parker, Mothercare's chairman and former chief executive of Costa Coffee owner Whitbread, was key to its first in-store café.
More innovatively, the shop has fake grass, a mini-bricked hill and pebble area for customers to try out new prams. Following Mothercare's debut clinic with Ultra Sound Direct in its York store, Edmonton's Babybond unit provides a scanning service for those who book online.
On his overall strategy for the UK, Mr Calver said: "If we give the customer what they want … we will succeed I have no doubt about it."
Referring to his own growing family, he said: "Mum's are not fantastically served in the UK. Trust me last year, I got to experience that first hand."
1961 Entrepreneur Selim Zilkha and Sir James Goldsmith open the first Mothercare store in Surrey
1962 Mail order business launched
1972 Floated on the stock market
1982 Merges with Habitat to form Habitat Mothercare
1984 Begins trading overseas through franchise partners
1986 Habitat Mothercare merges with British Home Stores to create Storehouse
2000 Bhs stores sold to Sir Philip Green and Mothercare becomes the sole brand
2007 Acquires Early Learning Centre for £85m
2011 Chief executive Ben Gordon quits. Group unveils UK store closure programme
2012 Simon Calver takes over from Gordon in April
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