Mothercare has confirmed plans to shut 111 UK stores by 2015, after a poor UK performance hit profits last year.
Total UK sales at Mothercare fell 4.6% to £560m in the year to 31 March, 2012, as UK losses hit £25m. Group sales went up 2.4% to £813m, boosted by a 17.8% rise in international sales, but the company still reported an overall loss before tax of £103m.
Mothercare said the UK market had been “particularly weak”, and that 200 stores is the optimum size for the company going forward. A store rationalisation plan is ongoing, and Mothercare ended its financial year with 311 stores.
The target of a portfolio of 200 stores will comprise profitable out of town stores, key in town stores and Early Learning Centres in strategic locations. The stores to be closed currently lose around £13m per year and will shut by 2015.
Mothercare has refinanced to fund its ‘transformation and growth’ plan, increasing committed bank facilities to £90m.
The plan also includes reducing store costs by £20m by 2015, restoring UK profitability, accelerating international growth in China, India, Russia and Brazil and introducing websites in all major international markets.
New chief executive Simon Calver, who joined the company on 30 April, said: “We have a long way to go, and the plan to bring the UK business back to acceptable levels of profitability will take three years. We need to invest in e-commerce, be ruthless with our non-store cost base and use our scale and growth worldwide to drive sourcing economies and pass these savings onto the customers to improve our value for money around the world.”
22 November 2012
18 October 2012
12 April 2012
17 November 2011
18 May 2011
16 July 2010